Climate Change Litigation: A Handbook 9781509948741, 9783406743894

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Foreword from the Editors This handbook investigates important legal issues that emerge from the highly topical discourse on climate protection. Experts from all over the world share their knowledge on “Climate Change Litigation”, illuminating different legal perspectives: international law, European law, as well as national public and private law. In addition, the present volume gives an overview of ongoing lawsuits and their relevant legal frameworks in different jurisdictions, including, inter alia, the United States, Canada, Australia, the UK, France, the Netherlands, Italy, Brazil, and Germany. Climate change is one of the greatest societal challenges of our time. Its legal coverage is in the process of establishing itself as an independent branch of environmental and international law and will most likely become one of the major legal markets of the future. Building upon this development, our handbook aims to pave the way for further legal research on climate change and upcoming legal proceedings in order to help protect our climate. Wolfgang Kahl and Marc-Philippe Weller Heidelberg University

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List of Abbreviations 2nd Cir. .............................. 9th Cir. ............................... A/RES ................................. A1P1 ................................... AC ....................................... ACCC ................................. ACHR ................................ AcP ..................................... addtl. supp. ....................... Admin ................................ AG ....................................... AG ....................................... AG ....................................... AJIL .................................... AktG ................................... ALI ...................................... Am. Indian L. Rev. .......... Am. Rev. Int‘l Arb. .......... AMF ................................... Ann. Econ. Finance ......... AO ...................................... APA .................................... Apple .................................. Approx. .............................. Ariz. St. L.J. ....................... Art. ...................................... ASEAN ............................... AtG ..................................... ATS ..................................... AVR .................................... BA ....................................... Bayer ................................... BB ........................................ BBC ..................................... BBVA ................................. BCG .................................... BCL ..................................... BCSC .................................. BeckOGK ........................... BeckOK .............................. BeckOK BGB .................... BeckOK ZPO .................... BeckRS ............................... BEIS .................................... Beschl. ................................ Beyerlin/Marauhn ........... BGB .................................... BGBl. .................................. BGE .................................... BGH .................................... BGH IPRspr ......................

U.S. Court of Appeals for the 2nd Circuit U.S. Court of Appeals for the 9th Circuit Resolutions of the UN General Assembly, indicating the session in which it was adopted and the date of adoption Article 1 of the First Protocol [to the European Convention on Human Rights] Aarhus Convention Aarhus Convention Compliance Committee American Convention on Human Rights Archiv für die civilistische Praxis additional supply Administrative division Advocate-General stock corporation (Aktiengesellschaft) Die Aktiengesellschaft (journal) American Journal of International Law German Stock Corporation Act (Aktiengesetz) American Law Institute American Indian Law Review American Review of International Arbitration French Financial Markets Authority (Autorité des marchés financiers) Annals of Economics and Finance Advisory Opinion Austria Presse Agentur Apple Inc. Approximately Arizona State Law Journal Article Association of South-East Asian Nations Atomgesetz Alien Tort Statute Archiv des Völkerrechts Bachelor of Arts Bayer AG Betriebs-Berater (journal) British Broadcasting Corporation Banco Bilbao Vizcaya Argentaria Boston Consulting Group Bachelor of Civil Law Supreme Court of British Colombia Beck’scher Online-Großkommentar Beck’scher Online-Kommentar Beck’scher Online-Kommentar zum BGB Beck’scher Online-Kommentar ZPO beck-online.RECHTSPRECHUNG [Department for] Business Energy & Industrial Strategy Beschluss Beyerlin/Marauhn, International Environmental Law, Hart/Beck 2011 Bürgerliches Gesetzbuch (German Civil Code) Bundesgesetzblatt Entscheidungen des Schweizerischen Bundesgerichts (jurisprudence of the Swiss Bundesgericht) The German Federal Court of Justice (Bundesgerichtshof) case law of the BGH refering to international private law

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List of Abbreviations BGHZ ................................. BImSchG ........................... BIT ...................................... BKR .................................... BL ........................................ BlackRock .......................... BMO ................................... BMO GAM ....................... BNatSchG .......................... BoE ..................................... BP ........................................ BRJ ...................................... Brussels Ibis Regulation (Reg.) .................................. BT-Drs. .............................. Bugge, Justice .................... Bugge, Law and Economics ......................... BUND ................................ BUND e. V. ....................... BV ....................................... BVerfG ............................... BVerfGE ............................ BVerfGG ............................ BVerwG ............................. C .......................................... C40 ...................................... CA ....................................... CAA .................................... CAA .................................... CalPERS ............................. CalSTRS ............................. Camb. L.J. .......................... Cass. civ. ............................ Cass. crim. ......................... CBA .................................... CBDR ................................. CCA .................................... CCLR .................................. CCS ..................................... CDP .................................... CDU ................................... CE ....................................... CEENRG ........................... CEO .................................... CER ..................................... CERCLA ............................ CETA ................................. CETS .................................. cf .......................................... CFR ..................................... Ch. ......................................

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Decisions in civil cases of the German Federal Court of Justice Bundes-Immissionsschutzgesetz Bilateral Investment Treaty Zeitschrift für Bank- und Kapitalmarktrecht Basic Law BlackRock Inc. Bank of Montreal BMO Global Asset Management Bundesnaturschutzgesetz Bank of England BP plc Bonner Rechtsjournal Regulation on Jurisdiction and the Recognition of Judgments in Civil and Commercial Matters from 2012 Bundestags-Drucksache Bugge, The Polluter Pays Principle: Dilemmas of Justice in National and International Contexts, in: Ebbeson/Okowa (eds), Environmental Law and Justice in Context, Cambridge University Press 2009, p. 411 Bugge, The Principles of “Polluter Pays” in Economics and Law in: van den Berg/Eide (eds), Law and Economics of the Environment, Juridisk 1996, p. 54 Bund für Umwelt und Naturschutz Deutschland (Association for Environment and Nature Conservation Germany) Bund für Umwelt und Naturschutz e. V. besloten vennotschap (limited liability cooperation) Bundesverfassungsgericht (German Federal Constitutional Court) Entscheidungen des Bundesverfassungsgerichts Bundesverfassungsgerichtsgesetz Bundesverwaltungsgericht (Federal Administrative Court) Celsius C40 Cities Climate Leadership Group Court of Appeal (Cour d’appel) Clean Air Act Administrative Court of Appeal (Cour administrative d’appel) California Public Employees’ Retirement System California State Teachers’ Retirement System Cambridge Law Journal Court of Cassation, Civil Chamber (Cour de cassation, chambre civil) Court of cassation, Criminal Chamber (Cour de cassation, chambre criminelle) Commonwealth Bank of Australia Common but Differentiated Responsibilities Climate Change Act 2008 Carbon & Climate Law Review Carbon Capture and Storage Carbon Disclosure Project Christlich Demokratische Union Council of State (Conseil d’Etat) Centre for Energy, Environment & Natural Resources Governance Chief Executive Officer Certified Emissions Reduction US Comprehensive Environmental Response, Compensation dand Liability Act Comprehensive Economic and Trade Agreement Council of Europe Treaty Series see, compare Charter of Fundemental Rights Chapter

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List of Abbreviations Charter ............................... CISDL ................................ Civ ....................................... CJ (as in Preston CJ) ...... cl. ......................................... CLC .................................... CLGI ................................... Climate L. Rep. ................ CLR ..................................... CLS ..................................... CMA ................................... CO2 ..................................... Col. J. Envtl. L. ................. Colo. J. Int. Env. L. & Pol. ...................................... Colum. L. Rev .................. COM .................................. CONAMA ......................... Cons. constit. .................... CoP ..................................... COP 21 .............................. Cornell L. Rev. ................. CORSIA ............................. COVID-19 ........................ CPTPP ............................... Crim ................................... CRISPP .............................. CSP ..................................... CSR ..................................... CSU .................................... Cth ...................................... D. ......................................... DALY ................................. DB ....................................... DC ....................................... DCC .................................... DCGK ................................ de Sadeleer, Principles .... de Sadeleer, Pro Natura ..

Deakin LR ......................... DGIR .................................. Doc ..................................... DÖV ................................... DPhil .................................. DStR ................................... Duke J. Comp. & Int’l L . Dupuy/Viñuales ............... DVBl. .................................. EACOP .............................. e.g. ....................................... e. V. ..................................... EAA ....................................

Charter of Fundamental Rights of the European Union Centre for International Sustainable Development Law Civil division Chief Justice clause Liability Convention Climate Law and Governance Initiative Climate Law Reporter Centre for Legal Resources Columbia law school Conference of the Parties serving as the Meeting of the Parties to the Paris Agreement Carbon Dioxide Columbia Journal of Environmental Law Colorado Journal of International Environmental Law and Policy Columbia Law Review Commission national environment commission Constitutional Council (Conseil constitutionnel) Conference of the Parties United Nations Framework Convention on Climate Change, 21st Conference of the Parties Cornell Law Review Carbon Offsetting and Reduction Scheme for International Aviation Coronavirus disease 2019 Comprehensive and Progressive Agreement for Trans-Pacific Partnership Criminal division Critical Review of International Social and Political Philosophy Concentrated Solar Power Corporate Social Responsibility Christlich-Soziale Union Commonwealth Decree (décret) disability adjusted life years Der Betrieb (journal) District Council Dutch Civil Code German Corporate Governance Code de Sadeleer, Environmental Principles – From Political Slogans to Legal Rules, Oxford University Press 2002 de Sadeleer, The Polluter-Pays Principle in EU Law – Bold Case Law and Poor Harmonisation, in: Backer/Fauchauld/Voigt (eds), Pro Natura, Festskrift til Hans Christian Bugge, Universitetsforlaged 2012, p. 405 Deakin Law Review Deutsche Gesellschaft für Internationales Recht Document Die öffentliche Verwaltung Doctor of Philosophy Das deutsche Steuerecht Duke Journal of Comparative & International Law Dupuy/Viñuales, International Environmental Law, 2nd ed., Cambridge University Press 2018 Deutsches Verwaltungsblatt East African Crude Oil Pipeline Exempli gratia (for example) eingetragener Verein Environmental Appeal Act

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List of Abbreviations EC ....................................... ECBI ................................... ECCHR .............................. ECE ..................................... ECHR ................................. ECJ ...................................... ECLI ................................... ECR ..................................... ECT ..................................... ECtHR ................................ ed./eds. ............................... eec ....................................... EEELR ................................ EGBGB ............................... EGC .................................... EIA ...................................... EL ........................................ ELD ..................................... Env. L. ................................ Env. L. Rep. ....................... EnWG ................................ EnWZ ................................. EOG Resources ................ EPA ..................................... EPA ..................................... Epiney ................................ EPL ..................................... ER ........................................ ESD ..................................... ESG ..................................... esp. ...................................... ESR ..................................... et al. .................................... et seq. ................................. ETS ..................................... EU ....................................... EU ETS .............................. EuGH ................................. EuGHE ............................... EUR .................................... EurUP ................................ EuZPR/EuIPR ................... EWCA ................................ EWHC ............................... ex. ........................................ f., ff. ..................................... F.; F.2d or F.3d ................. F.Supp.; F.Supp. 2d or F. Supp 3d ......................... FAS ..................................... FATMA ............................. FAZ ..................................... FC ........................................ FCA .................................... FCR ..................................... FET ..................................... Fiduciary Duty Report ... file ref. ................................ FIT ......................................

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European Commission European Capacity Building Initiative European Center for Constitutional and Human Rights e. V. UNECE, Economic Commission for Europe European Convention on Human Rights and Fundamental Freedoms European Court of Justice European Case Law Identifier European Court Reports Energy Charter Treaty European Court of Human Rights editor/editors European economic community European Energy and Environmental Law Review Einführungsgesetz zum Bürgerlichen Gesetzbuch (German Introductory Act to the Civil Code) General Court of the European Union Environmental Impact Assessment Ergänzungslieferung Environmental Liability Directive Environmental Law Environmental Law Reporter Energiewirtschaftsgesetz Zeitschrift für das gesamte Recht der Energiewirtschaft EOG Resources, Inc. United States Environmental Protection Agency U.S. Environmental Protection Agency Epiney, Umweltrecht der Europäischen Union, 3rd ed., Nomos 2013 Environmental Policy & Law Energierecht ecologically sustainable development Environmental, Social and Governance especially Effort Sharing Regulation and others et sequens (and the following) Emission Trading System European Union EU Emissions Trading System Gerichtshof der Europäischen Union Entscheidungssammlung des EuGH Euro Zeitschrift für europäisches Umwelt- und Planungsrecht Europäisches Zivilprozess- und Kollisionsrecht England and Wales Court of Appeal England and Wales High Court example following Federal Reporter Federal Supplement Frankfurter Allgemeine Sonntagszeitung foundation of the environment Frankfurter Allgemeine Zeitung Federal Court Federal Court of Appeal Federal Court Report Fair and equitable agreement Fiduciary Duty in the 21st Century – Final Report file reference Feed-in Tariff

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List of Abbreviations Fla. L. Rev. ........................ fn./s ..................................... Fordham Int’l L.J. ............ FS ........................................ FSB ...................................... FT ........................................ GIC ..................................... FTA ..................................... G20 ..................................... G7 ....................................... Ga. St. L. Rev. ................... GAOR ................................ GATT ................................. GBRMP .............................. GBRWHA ......................... GCF .................................... GDP .................................... GEIA .................................. Geo. Int’l Envtl. L. Rev. .. Georgetown L.J. ............... GG ...................................... GHDHA ............................ GHG ................................... GLJ ...................................... Global Risks Report 2020 .................................... GmbH ................................ GOBReg ............................. GOBReg ............................. GPR .................................... GPR .................................... GWP ................................... Harv. Bus. Rev. ................ Harv. Envtl. L. Rev. ......... Harv. L. Rev. ..................... HFC .................................... HGB .................................... HPflG ................................. HR ....................................... HSBC .................................. i.a. ........................................ I.C.J. .................................... I.C.J. Reports .................... i.e. ........................................ IACtHR .............................. IASB ................................... IBAMA .............................. IBDF ................................... Ibid. ..................................... ICAO .................................. ICCPR ................................ ICESCR .............................. ICJ ....................................... ICLQ ................................... ICSID ................................. ICTSD ................................

Florida Law Review footnote/s Fordham International Law Journal Festschrift Financial Stability Board Financial Times Global Investor Coalition on Climate Change Free Trade Agreement Group of Twenty Group of Seven Georgia State Law Review General Assembly Official Records General Agreement on Tariffs and Trade Great Barrier Reef Marine Park Great Barrier Reef World Heritage Area Green Climate Fund Gross Domestic Product Green Energy Investment Agreement Georgetown International Environmental Law Review Georgetown Law Journal Basic Law for the Federal Republic of Germany (Grundgesetz der Bundesrepublik Deutschland) Gerechtshof Den Haag (Court of lower instance in the Nederlands) Greenhouse Gas German Law Journal The Global Risks Report 2020, World Economic Forum in partnership with Marsh & McLennan and Zurich Insurance Group company with limited liablility (Gesellschaft mit beschränkter Haftung) Geschäftsordnung der Bundesregierung Geschäftsordnung der Bundesregierung Zeitschrift für das Privatrecht der Europäischen Union Zeitschrift für das Privatrecht der Europäischen Union global warming potential Harvard Business Review Harvard Environmental Law Review Harvard Law Review Hydrofluorcarbon German Commercial Code (Handelsgesetzbuch) Haftpflichtgesetz Hoge Raad (Supreme Court for Civil and Criminal Matters in the Nederlands) HSBC Holdings plc inter alia International Court of Justice Case Reports of the International Court of Justice Id est (that is) Inter-American Court on Human Rights International Accounting Standards Board Brazilian institute for the environment and natural resources Brazilian institute of forest development Ibidem (lat.); in the same place International Civil Aviation Organization (ICAO) International Covenant on Civil and Political Rights International Covenant on Economic, Social and Cultural Rights International Court of Justice International & Comparative Law Quarterly International Centre for Settlement of Investment Disputes International Centre for Trade and Sustainable Development

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List of Abbreviations Id. ........................................ IEHC .................................. ILC ...................................... ILM ..................................... IMO .................................... Inc. ...................................... Ind. J. Global Legal Stud. infra .................................... ING ..................................... INPE ................................... IoT ...................................... IPC ...................................... IPCC ................................... IPCC ................................... IRENA ............................... IPRax .................................. IRENA ............................... ISBA ................................... ISO ...................................... ISPRA ................................. ITEK ................................... ITLOS ................................. IWRZ ................................. IZVR ................................... J (as in Dowsett J) ........... J. Envtl. L ........................... J. En. & Nat. Res. L. ........ Jan. ...................................... JANA .................................. JBl. ....................................... JEEPL ................................. JETL .................................... JETL .................................... JPL ...................................... jurisPK-BGB ..................... JuS ....................................... JZ ......................................... Kap. .................................... KJ ........................................ km ....................................... Kritischen Aktionäre ...... KSG .................................... L R ...................................... L. .......................................... L.Ed.; L.Ed. 2d .................. LCIL .................................... LDC .................................... leg cit .................................. LG ....................................... LGERA ............................... LL.M. .................................. LLB ..................................... LLC ..................................... Ltd. ......................................

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Idem (same author) High Court of Ireland International Law Commission International Legal Materials International Maritime Organization Incorporated Indiana Journal of Global Legal Studies see below ING-DiBA AG national institute of spacial research Internet of Things Independent Planning Commission Intergovernmental Panel on Climate Change Intergovernmental Panel on Climate Change International Renewable Energy Agency Praxis des Internationalen Privat- und Verfahrensrechts International Renewable Energy Agency International Seabed Authority International Organization for Standardization Istituto Superiore per la Protezione e la Ricerca Ambientale (Institute for Environmental Protection and Research) Indigenous traditional ecological knowledge International Tribunal for the Law of the Sea Zeitschrift für Internationales Wirtschaftsrecht (journal) Internationales Zivilverfahrensrecht Judge or Justice Journal of Environmental Law Journal of Energy & Natural Resources Law January JANA Partners LLC Juristische Blätter Journal for European Environmental and Planning Law Journal of European Tort Law Journal of Education, Teaching and Learning Journal of Planning Law juris PraxisKommentar BGB Juristische Schulung JuristenZeitung Kapitel Kritische Justiz kilometres Dachverband der Kritischen Aktionärinnen und Aktionäre (Umbrella Association of Critical Shareholders) Bundes-Klimaschutzgesetz Law Review Law (loi) United States Supreme Courts Reports, Lawyers’ Edition Lauterpacht Centre for International Law Least developed countries legis citatae Landgericht (German Regional Court) Local Government and Environmental Reports of Australia Master of Laws Bachelor of Laws Limited Liability Company Limited

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List of Abbreviations LUCLUF ............................

LuftVG ............................... LULU ................................. m ......................................... M&A .................................. MBRE ................................. MDR ................................... Melb. Univ. Law Rev. ..... MEM .................................. Minn. L. Rev. .................... mn., mns. ........................... MPEPIL ............................. MPhil .................................. MüKo ................................. MüKoBGB ......................... MüKoZPO ........................ MünchKomm ................... MW .................................... n. ......................................... N.Y.U. J. Int’l L. & Pol ... NAFTA .............................. NAP .................................... NAS .................................... NASA ................................. NDC ................................... NECP ................................. Ned Jur .............................. NEMA ................................ NES ..................................... NGO ................................... NIMBY .............................. NJOZ .................................. NJW .................................... NJW-RR ............................ No. ...................................... NOx .................................... NPPF .................................. NRO ................................... NSW ................................... NSWLEC ........................... NuR .................................... NVwZ ................................. NYT .................................... NZG .................................... OECD ................................. OECD, Accidental Pollution .................................. OGH ................................... OJ ........................................ OJ EU ................................. ÖJZ ..................................... OLG ....................................

Regulation (EU) 2018/841 of the European Parliament and of the Council of 30 May 2018 on the inclusion of greenhouse gas emissions and removals from land use, land use change and forestry in the 2030 climate and energy framework, and amending Regulation (EU) No 525/2013 and Decision No 529/2013/EU (Text with EEA relevance) PE/68/2017/REV/1,OJ 2018, L 156/1 Luftverkehrsgesetz locally unwanted land use metres Mergers and Acquisitions Brazilian emission reduction market Monatsschrift für Deutsches Recht – MDR Zeitschrift für Zivil- und Zivilverfahrensrecht Melbourne University Law Review Master of Environmental Management Minnesota Law Review margin number(s) Max Planck Encyclopedia for Public International Law Master of Philosophy Münchener Kommentar Münchener Kommentar zum Bürgerlichen Gesetzbuch Münchener Kommentar zur Zivilprozessordnung Münchener Kommentar zum Bürgerlichen Gesetzbuch Megawatt note New York University Journal of International Law and Politics North American Free Trade Agreement National Adaptation Plan National Adaptation Strategy national aeronautics and space administration National Determined Contributions National Energy and Climate Plan Nederlandse Jurisprudentie National Environmental Management Act National Energy Strategy Non-Governmental Organisation not in my backyard Neue Juristische Online Zeitschrift Neue Juristische Wochenschrift (journal) Neue Juristische Wochenschrift – Rechtsprechungs-Report Numero (number) nitrogen oxides National Planning Policy Framework Nichtregierungsorganisation New South Wales New South Wales Land and Environment Court Natur und Recht Neue Zeitschrift für Verwaltungsrecht (journal) New York Times Neue Zeitschrift für Gesellschaftsrecht (journal) Organisation for Economic Co-operation and Development OECD, Recommendation on the Application of the Polluter-Pays Principle to Accidental Pollution, C (89) 99 Oberster Gerichtshof (Supreme Court for Civil and Commercial Matters in Austria) Ontario Judgement Official Journal of the European Union Österreichische Juristen-Zeitung Oberlandesgericht (German Higher Regional Court)

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List of Abbreviations ONCA ................................ ONSC ................................. OPA .................................... Orlando .............................. Ors ...................................... P (as in MacDonald P) .. p. .......................................... PA ....................................... Pac. Rim L. & Pol’y J. ..... PACTE ............................... PAD .................................... para ..................................... PAWP ................................ PHG .................................... PLC ..................................... plc ....................................... PNMC ................................ Pol’y Sciences ................... PPP ..................................... PRI ...................................... Proelss ................................ publ. .................................... PV ....................................... QCA ................................... QCCS ................................. QLC .................................... Qld ...................................... QLRT ................................. QSC .................................... R&D .................................... RWE ................................... RabelsZ .............................. RCRA ................................. RECIEL .............................. Reg. ..................................... Rev. ..................................... RG ....................................... RGZ .................................... RIAA .................................. RIW .................................... RL ........................................ RSC ..................................... RSO ..................................... RWE ................................... s (as in s 269) ................... S. .......................................... S.A. ...................................... S.Ct. .................................... SA ........................................ sad ....................................... San Diego J. Climate & Energy L. ........................... Sands/Peel .........................

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Ontario Court of Appeal Ontario Superior Court of Justice US Oil Pollution Act Orlando, Liability, in: Krämer/Orlando (eds), Principles of Environmental Law, Edward Elgar 2018, p. 272 Others President page Paris Agreement Pacific Rim Law & Policy Journal Action Plan for Growth and Transformation of Businesses (Plan d’action pour la croissance et la transformation des entreprises) Planning and Development paragraph Paris Agreement Work Programme Produkthaftungsgesetz private limited company Public Limited Company national policy on climate change Policy Sciences Polluter-Pays Principle Principles for Responsible Investments Proelss, Polluter-Pays, in: Aguila/Viñuales (eds), A Global Pact for the Environment – Legal Foundations, Cambridge University Press 2019, p. 85 publisher Photovoltaic Queensland Court of Appeal Quebec Superior Court Queensland Land Court Queensland Queensland Land and Resources Tribunal Queensland Supreme Court Research and Development RWE AG Rabels Zeitschrift für ausländisches und internationales Privatrecht (Rabel Journal of Comparative and International Private Law) US Resource Conservation and Recovery Act Review of European Community and International Environmental Law Regulation (EU) Review (revue) Reichsgericht Entscheidungen des Reichsgerichts in Zivilsachen Reports of International Arbitral Awards Recht der internationalen Wirtschaft Richtlinie Revised Statutes of Canada Revised Statutes of Ontario RWE AG, formerly Rheinisch-Westfälisches Elektrizitätswerk AG Section Seite (page) Société Anonyme Supreme Court Reporter Sociedade Anónima deforestation alert system San Diego Journal of Climate and Energy Law Sands/Peel, Principles of International Environmental Law, 4th ed., Cambridge University Press 2018

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List of Abbreviations SASB ................................... SBI ....................................... SC ........................................ SC ........................................ SCC ..................................... Schwartz, Principles ........ Schwartz, Research Handbook ......................... SCR/RCS ............................ SDG .................................... SEA ..................................... sect ...................................... SEED .................................. sent ..................................... Shareholder Action Guide .................................. Shell .................................... SIAESP ............................... SIDS .................................... Siemens .............................. SIFAESP ............................ SKCA .................................. SO2 ..................................... SPD ..................................... SRU ..................................... STF ...................................... STJ ...................................... StVG ................................... SUP ..................................... supra ................................... TA ....................................... TAR .................................... TCFD ................................. TEC ..................................... TEHG ................................. TEL ..................................... TEU .................................... Tex. Int. L. J. ..................... TFEU .................................. TGI ..................................... The Hon ............................ Trillium .............................. TUI ..................................... U. Chi. L. Rev. .................. U. Colo. L. Rev. ................ U. Pa. L. Rev. .................... U.Pitt.L.Rev. ...................... U.S. ..................................... UBA .................................... UBS ..................................... UK ....................................... UKSC ................................. ULR .................................... UMAG ...............................

Sustainability Accounting Standards Board Subsidiary Book for Implementation Statutes of Canada Senior Counsel Supreme Court of Canada Schwartz, The Polluter-Pays Principle, in: Krämer/Orlando (eds), Principles of Environmental Law, Edward Elgar 2018, p. 260 Schwartz, The polluter-pays principle, in: Fitzmaurice/Ong/Merkouris (eds), Research Handbook on International Environmental Law, Edward Elgar 2010, p. 243 Supreme Court Report Sustainable Development Goals Strategic Environmental Assessment section School of Environment, Enterprise & Development sentence The Shareholder Action Guide – Unleash Your Hidden Powers to Hold Corporations Accountable Royal Dutch Shell Union of the sugar industries in the state of São Paulo Small island developing states Siemens AG Union of the alcohol manufacturing industries of the state of São Paulo Saskatchewan Court of Appeal Sulfur dioxide Sozialdemokratische Partei Deutschlands Sachverständigenrat für Umweltfragen supreme federal court superior court of justice Straßenverkehrsgesetz Strategische Umweltprüfung see above Administrative Tribunal (Tribunal administratif) Tribunale Amministrativo Regionale (Regional Administrative Court) Task Force on Climate Related Financial Disclosures Treaty establishing the European Community Treibhausgas-Emissionshandelsgesetz Transnational Environmental Law Treaty of the European Union Texas International Law Journal Treaty on Functioning of the European Union Court of First Instance (Tribunal de grande instance) The Honourable Trillium Asset Management TUI AG University of Chicago Law Review University of Colorado Law Review University of Pennsylvania Law Review University of Pittsburgh Law Review United States (of America) Umweltbundesamt UBS Group AG United Kingdom United Kingdom Supreme Court Uniform Law Review German Act on Corporate Integrity and Modernisation of Avoidance and Rescission Rights (Gesetz zur Unternehmensintegrität und Modernisierung des Anfechtungsrechts)

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List of Abbreviations UmweltHG ........................ UmweltR ............................ UmwRG ............................. UN ...................................... UN FCCC ......................... UNCITRAL ...................... UNCLOS ........................... UNEP ................................. UNEP FI ............................ UNFCCC ........................... UNTC ................................ UNTS ................................. UNTS ................................. UPR .................................... Urt. ...................................... US ....................................... USA .................................... USchadG ........................... USD .................................... UTR .................................... UVP .................................... UVPG ................................. v. .......................................... Va. J. Int’l L. ..................... Vanguard ........................... VersR .................................. VG ...................................... vol. ...................................... VwGO ................................ VwVfG ............................... WBGU ............................... WD ..................................... WEF .................................... WEF/BCG Report ........... WHG .................................. WM .................................... WMO ................................. WP ...................................... WSJ ..................................... WTO .................................. WWF .................................. Yale J. Int’l L. Online ...... Yale L.J. .............................. YbPIL ................................. ZaöRV ................................ ZEuP ................................... ZfU ...................................... ZGR .................................... ZHR .................................... ZIP ...................................... ZPO .................................... ZUR .................................... ZZPInt ................................

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Umwelthaftungsgesetz Umweltrecht Umwelt-Rechtsbehelfsgesetz United Nations United Nations Framework Convention on Climate Change United Nations Commission On International Trade Law UN Convention on the Law of the Sea United Nations Environment Programme United Nations Environment Programme Finance Initiative United Nations Framework Convention on Climate Change United National Treaty Collection United Nations Treaty Series United Nations Treaty Series Umwelt- und Planungsrecht Urteil United States United States of America Umweltschadensgesetz United States Dollar Umwelt- und Technikrecht Umweltverträglichkeitsprüfung Gesetz über die Umweltverträglichkeitsprüfung versus/von Virginia Journal of International Law Vanguard Group Zeitschrift für Versicherungsrecht, Haftungs- und Schadensrecht Verwaltungsgericht volume Verwaltungsgerichtsordnung Verwaltungsverfahrensgesetz Wissenschaftlicher Beirat der Bundesregierung für Globale Umweltveränderungen Wissenschaftlicher Dienst World Economic Forum The Net Zero Challenge: Fast Forward to Decisive Action, Insight Report in collaboration with Boston Consulting Group Wasserhaushaltsgesetz Zeitschrift für Wirtschafts- und Bankrecht (journal) World Meteorological Organization (Weltorganisation für Meteorologie) Write Petition The Wall Street Journal World Trade Organisation World Wide Fund For Nature Yale Journal of International Law online Yale Law Journal Yearbook of Private International Law Zeitschrift für ausländisches öffentliches Recht und Völkerrecht Zeitschrift für Europäisches Privatrecht Zeitschrift für Umweltpolitik und Umweltrecht Zeitschrift für Unternehmens- und Gesellschaftsrecht (journal) Zeitschrift für das gesamte Handelsrecht und Wirtschaftsrecht (journal) Zeitschrift für Wirtschaftsrecht (journal) Zivilprozessordnung (German Code of Civil Procedure) Zeitschrift für Umweltrecht (journal) Zeitschrift für Zivilprozess International

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List of Authors Arvid Arntz is a doctoral researcher at the chair for Private Law, Commercial Law and Economic Analysis of Law in the Law Faculty of Humboldt-Universitaet zu Berlin, Germany. Timothy Arvan, BA (Hons.) (University of Michigan), MPhil (Cantab), is Associate Fellow at the Centre for International Sustainable Development Law (CISDL), and Secretariat Coordinator at Climate Law and Governance Initiative (CLGI). Justine Bell-James, LLB(Hons), GradDipLegalPrac, PhD(QUT) is Associate Professor at the University of Queensland School of Law in Brisbane (Australia). Luciano Butti, Lecturer of International Environmental Law, Department of Environmental Engineering, University of Padua (I); Life Member at the Clare Hall College, University of Cambridge (UK); Of Counsel at B&P Law Firm, Verona and Milan (Italy). Chantalle Byron, BSc (Acadia University), LLB Hons (University of Essex), LLM (Cantab), is Associate Fellow at the CISDL, and Secretariat Coordinator at Climate Law and Governance Initiative (CLGI). Marie-Claire Cordonier Segger, DPhil (Oxon), MEM (Yale), LLB/BCL (McGill), BA Hons, is CISDL Senior Director, Full Professor of Law, School of Environment, Enterprise & Development (SEED) at the University of Waterloo (Canada). Kars de Graaf is professor of Public Law and Sustainability, Groningen Centre of Energy Law and Sustainability (GCELS), Faculty of Law, University of Groningen (The Netherlands) and chair of the Dutch Environmental Law Association. Katrin Deckert, docteur en droit, D.E.A./D.E.S.S. (Univ. Paris 1), LL.M. (HU Berlin), is Associate Professor (Maître de conférences) at Paris Nanterre University (France). Christian Duve is a professor and one of the co-founding partners of the law firm V29 Legal PartGmbB in Frankfurt am Main. Max Ehrl, Notary Assessor at the Bavarian Chamber of Notaries and director of the German Notaries’ Association, Berlin. Formerly he was Professor Habersack’s research assistant. Aude-Solveig Epstein holds a Master’s degree in Economic Law from Sciences Po Paris and a Ph. D from the University of Nice. She is an Assistant Professor (Maître de conférences) at Paris Nanterre University. Daniel Farber holds the Sho Sato Chair in Law and is the director of the Center for Law, Energy, and the Environment at the University of California, Berkeley. Claudio Franzius, Prof. Dr., is professor for public law and director of the Research Center for Europan Environmental Law, University of Bremen, Law Faculty. Thomas Gross is Professor of Public Law, European Law and Comparative Law at the University of Osnabrueck. Mathias Habersack holds the Chair of Private and Business Law at the Ludwig-MaximiliansUniversity Munich. Olga Hamama is co-founding partner of the law firm V29 Legal PartGmbB in Frankfurt am Main. Sébastien Jodoin is an Assistant Professor in the McGill Faculty of Law, where he holds the Canada Research Chair in Human Rights and the Environment. Wolfgang Kahl, Prof. Dr. Dr. h.c., is professor for public law, director of the Institute of German and European Administrative Law and director of the Research Center for Sustainability Law, University of Heidelberg, Law Faculty.

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List of Authors Eva-Maria Kieninger, Prof. Dr., is professor for German and European Private Law and Private International Law at the Julius-Maximilians-University Wuerzburg. Anne Kling is a doctoral researcher at the Research Center for European Environmental Law (FEU) at the University of Bremen. Michael Kloepfer, Prof. em. Dr., Humboldt University of Berlin; emeritus professor for constitutional law and administrative law, European Union law, environmental law, public finance and economic law; director of the Environmental Law Research Centre. Thomas Lennarz is a partner at CMS in Stuttgart and the head of CMS’s German dispute resolution group. Morgan McGinn is a Research Associate with the Canada Research Chair in Human Rights and the Environment and a BCL/JD student at the McGill Faculty of Law. Steven McNab is a partner at Cleantech Cadre. Jan-Marcus Nasse, Dr., was a research assistant at the Institute of Environmental Physics at Heidelberg University. Laura Nasse is a research assistant at the Institute for Comparative Law, the Conflict of Laws and International Business Law at Heidelberg University. Rico David Neugärtner, LL.M. (Cornell), Humboldt University of Berlin; research assistant for constitutional law and environmental law; doctoral student in constitutional law, comparative law, law and the humanities. Stephanie Nitsch is a research and teaching assistant (post doc) at the Department for European, International and Comparative Law, University of Vienna (Austria). Birsha Ohdedar is a lecturer at the School of Law and Human Rights Centre at the University of Essex. Séverin Pabsch, attorney of law (Hamburg). Mehrdad Payandeh, Dr. iur., LL.M. (Yale), is Professor of International Law, European Law, and Public Law at Bucerius Law School, Hamburg, and a Member of the United Nations Committee on the Elimination of Racial Discrimination. Kai Purnhagen, Chaired Professor of Food Law, University of Bayreuth, Faculty of Life Sciences: Food, Nutrition and Health (Campus Kulmbach). Eckard Rehbinder is an Emeritus Professor of Economic and Environmental Law and Comparative Law at the Law Faculty of the Goethe-University Frankfurt am Main. Johannes Saurer, Prof. Dr. LL.M. (Yale), is Professor for Public Law, Environmental Law, Law of Infrastructure and Comparative Law at the University of Tuebingen. Pavan Srinivas, BA LLB Hons (National Law School of India University), LLM (Cantab), is Associate Fellow at the CISDL, and Secretariat Coordinator at Climate Law and Governance Initiative (CLGI). Marie-Christin Stürmlinger is a doctoral researcher at the Institute of German and European Administrative Law and at the Research Center for Sustainability Law, University of Heidelberg, Law Faculty. Gerrit van der Veen is professor of Environmental Law, Faculty of Law, University of Groningen (The Netherlands) and lawyer/partner at AKD, Rotterdam (The Netherlands). Roda Verheyen, attorney of law (Hamburg). Christina Voigt, Prof. Dr., PhD (Oslo), LL.M. Hons (Auckland), is professor of law at the University of Oslo, Department of Public and International Law, chair of the Climate Change Specialist Group of the IUCN World Commission on Environmental Law, senior legal counsel at CISDL and co-chair of the Paris Agreement’s Implementation and Compliance Committee (PAICC).

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List of Authors Gerhard Wagner, Prof. Dr. LL.M. (University of Chicago), holds the chair for Private Law, Commercial Law and Economic Analysis of Law in the Law Faculty of Humboldt-Universitaet zu Berlin, Germany. He is also an external member of the Max-Planck-Institute of Private Law in Hamburg. Gabriel Wedy, Ph.D and LL.M in environmental and climate change law. He is a federal judge and a professor of the graduate and undergraduate programmes of Universidade do Vale do Rio dos Sinos (Unisinos), environmental law professor at the Brazilian Federal Judiciary Superior School. Marc-Philippe Weller, Prof. Dr., Licencié en droit (Montpellier), is director of the Institute for Comparative Law, the Conflict of Laws and International Business Law at Heidelberg University. Rüdiger Wolfrum, Prof. Dr. Dres h.c., is director emeritus of the Max Planck Institute for Comparative Public Law and International Law, Heidelberg and member of the Law Faculty, University of Heidelberg.

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INTRODUCTION CLIMATE CHANGE AS A CHALLENGE FOR GLOBAL GOVERNANCE, COURTS AND HUMAN RIGHTS Bibliography: Bodansky, The Art and Craft of International Environmental Law, Harvard University Press, (2011); Bodansky/Brunnée/Hey (eds.), The Oxford Handbook of International Environmental Law, Oxford University Press, (2008); Boyle/Redgwell, International Law and the Environment, 4th ed., Oxford University Press, (2019); Committee on the Elimination of Discrimination Against Women, Committee on Economic, Social and Cultural Rights, Committee on the Protection of the Rights of All Migrant Workers and Members of their Families, Committee on the Rights of the Child, and Committee on the Rights of Persons with Disabilities, Joint Statement on “Human Rights and Climate Change”, (16 September 2019) http://https://www.ohchr.org/en/NewsEvents/Pages/DisplayNews.aspx?NewsID=24998&LangID=E; Crawford, Commentary on Draft Articles on State Responsibility, Oxford University Press, Oxford, (1999); Das/ van Asselt/Droege/Mehling, Towards a Trade Regime that Works for the Paris Agreement, Economic & Political Weekly, Vol. 54, Issue No. 50, (December 2019); Desierto, “Environmental Damages, Environmental Reparations, and the Right to a Healthy Environment: The ICJ Compensation Judgment in Costa Rica v Nicaragua and the IACtHR Advisory Opinion on Marine Protection for the Greater Caribbean” EJIL: Talk!, 14 February 2018, available at www.ejiltalk.org, (accessed 3 June 2018); Feria-Tinta, “The Rise of Environmental Law in International Dispute Resolution: Inter-American Court of Human Rights issues Landmark Advisory Opinion on Environment and Human Rights” EJIL.Talk!, (26 February 2018), available at www.ejiltalk.org , (accessed 24 April 2019); Freeman, “Responsibility of States for Unlawful Acts of their Armed Forces” (1955-II) 88 Recueil des Cours de l’Academie de Droit International de la Haye, (1955); Intergovernmental Panel on Climate Change (IPCC), Global Warming of 1.5°C: An IPCC Special Report on the impacts of global warming of 1.5°C above pre-industrial levels and related global greenhouse gas emission pathways, in the context of strengthening the global response to the threat of climate change, sustainable development, and efforts to eradicate poverty, (October 2018); Intergovernmental Panel on Climate Change (IPCC), Special report on climate change, desertification, land degradation, sustainable land management, food security, and greenhouse gas fluxes in terrestrial ecosystems, Summary for Policymakers, (2019); Intergovernmental Panel on Climate Change (IPCC), Special Report on the Ocean and Cryosphere in a Changing Climate (September 2019), Summary for Policymakers, (2019); Intergovernmental Panel on Climate Change (IPCC), Summary for Policymakers. In: Global Warming of 1.5°C. An IPCC Special Report on the impacts of global warming of 1.5°C above pre-industrial levels and related global greenhouse gas emission pathways, in the context of strengthening the global response to the threat of climate change, sustainable development, and efforts to eradicate poverty, [Masson-Delmotte, V., P. Zhai, H.-O. Pörtner, D. Roberts, J. Skea, P.R. Shukla, A. Pirani, W. Moufouma-Okia, C. Péan, R. Pidcock, S. Connors, J.B.R. Matthews, Y. Chen, X. Zhou, M.I. Gomis, E. Lonnoy, T. Maycock, M. Tignor, and T. Waterfield (eds.)], World Meteorological Organization, (2018); International Law Association, ‘Due Diligence in International Law’ (Reports) http://www.ila-hq.org/index.php/study-groups; Kulesza, Due Diligence in International Law, Brill Nijhoff, (2016); Newcombe/Paradell, Law and Practice of Investment Treaties: Standards of Treatment, (2009); Koivurova, “Due Diligence” in Max Planck Encyclopedia of Public International Law, Oxford University Press, Oxford, (2013); United Nations Environment Programme, Emissions Gap Report 2019, (November 2019); United Nations Security Council, Gaps in International Environmental Law and Environment-related Instruments: Towards a Global Pact for the Environment – Report of the SecretaryGeneral, UN Doc A/73/419, (30 November 2018); Sands et al., Principles of International Environmental Law, 4th ed., Cambridge University Press, (2018); Vega-Barbosa/Aboagye, “Human Rights and the Protection of the Environment: The Advisory Opinion of the Inter-American Court of Human Rights” EJIL:Talk!, (26 February 2018), available at www.ejiltalk.org (accessed 24 April 2019); Verheyen, Climate Damage and International Law: Prevention Duties and State Responsibilities, Martinus Nijhoff, (2005); Voigt, “Climate Change and Damages” in C Carlarne, K Grey and R Tarasofsky (eds.) Oxford Handbook of International Climate Change Law, Oxford University Press, (2016); Voigt, ‘The Paris Agreement: What is the standard of conduct for parties?’, Questions of International Law, (24 May 2016) http://www.qil-qdi.org/paris-agreement-standard-conduct-parties/; Voigt/Ferreira, ‘‘Dynamic Differentiation’: The Principles of CBDR-RC, Progression and Highest Possible Ambition in the Paris Agreement,’ Transnational Environmental Law 5(2), Cambridge University Press, (2016).

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Introduction Contents I. Introduction: climate change – a global threat........................................ II. Challenges (and possibilities) for global governance and international law ............................................................................................. III. The role of courts ........................................................................................... 1. Addressing the causes of climate change.............................................. 2. Addressing the consequences of climate change................................. 3. Response measures to climate change ................................................... IV. Major legal issues ............................................................................................ V. Potential role for litigation in national courts..........................................

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I. Introduction: climate change – a global threat Climate change is a threat of unprecedented dimensions, both in scope, scale, time and space. If unresolved, it has the potential to undermine the basis of (relative) global stability and order. Scientists have over many decades warned about the human impact on the climate system, but never have they been so clear and never expressed their concern with greater certainty and urgency as in the recent reports of the Intergovernmental Panel on Climate Change (IPCC).1 2 The 2018 special report by the IPPC “Global Warming of 1.5 Degrees” shows that if global warming exceeds 1.5 degrees Centigrade, the consequences will be deeply disruptive for human systems (economic, social, even legal), as well as for ecosystems and species.2 Moreover, if warming continues up to 2 degrees or more, the consequences will be catastrophic. Warming of 1.5 degrees Centigrade and corresponding concentrations of greenhouse gases (GHGs) in the atmosphere will increase the probability of severe droughts and heavy precipitation in several regions, lead to sea level rise, ocean de-oxygenation and increased ocean acidity3, impact biodiversity and ecosystems and create significant climate-related risks to health, livelihoods, food security, water supply and human security. The impacts intensify and self-enforce with greater warming. For example, already observed ice loss from Antarctica may be the onset of an irreversible ice sheet instability which has the potential to lead to sea-level rise of several meters within a few centuries.4 Moreover, at global warming of 1.5 degrees Centigrade, most natural and human systems will reach the limit of their adaptive capacity; meaning that warming above and beyond leads to abrupt and unpredictable change. And yet, we are currently headed towards 3.2 degrees Centigrade warming.5 1

1 Intergovernmental Panel on Climate Change (IPCC), Global Warming of 1.5°C: An IPCC Special Report on the impacts of global warming of 1.5°C above pre-industrial levels and related global greenhouse gas emission pathways, in the context of strengthening the global response to the threat of climate change, sustainable development, and efforts to eradicate poverty (October 2018) Summary for Policymakers 3–24 (IPCC 2018); IPCC, Special report on climate change, desertification, land degradation, sustainable land management, food security, and greenhouse gas fluxes in terrestrial ecosystems, Summary for Policymakers (IPCC, 2019a); IPCC, Special Report on the Ocean and Cryosphere in a Changing Climate (September 2019), Summary for Policymakers (IPCC, 2019b). 2 IPCC, Summary for Policymakers. In: Global Warming of 1.5°C. An IPCC Special Report on the impacts of global warming of 1.5°C above pre-industrial levels and related global greenhouse gas emission pathways, in the context of strengthening the global response to the threat of climate change, sustainable development, and efforts to eradicate poverty, (World Meteorological Organization, Geneva, Switzerland), 32 pp (IPCC, 2018). 3 IPCC, 2019 b. 4 IPCC 2019b, 11. 5 United Nations Environment Programme, Emissions Gap Report 2019 (Report, November 2019), https://www.unenvironment.org/resources/emissions-gap-report-2019 (‘UNEP’).

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Climate change as a challenge for global governance, courts and human rights

The extent to which those future risks will materialise depends on the choices made 3 today, in particular on the ambition of climate change mitigation measures. The timewindow for resolving this challenge is rapidly narrowing. According to scientists, a fundamental, system-wide re-organisation across technological, economic and social factors needs to happen within the next 10–15 years; the ‘critical decade’ in order to be able to reduce GHG emissions to net-zero by around 2050 and get to negative emissions thereafter.6 This is a daunting task. The IPCC states:7 4 “Pathways limiting global warming to 1.5°C with no or limited overshoot would require rapid and far-reaching transitions in energy, land, urban and infrastructure (including transport and buildings), and industrial systems. These systems transitions are unprecedented in terms of scale, but not necessarily in terms of speed, and imply deep emissions reductions in all sectors, a wide portfolio of mitigation options and a significant upscaling of investments in those options.” If such transformative changes come too late, we will have to deal with the 5 consequences of our collective inactions, which most likely will be unravelling and catastrophic. These consequences could set an end to the order as we know it and give rise to unilateralism, instability, insecurity and the use of might (if not chaos and anarchy). Law, on all levels – international, regional and national, is an important lever in the 6 necessary transformation. It can help to tilt the scale towards sustainable development and change by spurring global action to limit climate change and address its adverse effects. New climate relevant legislation has to be devised, adopted, implemented and enforced. Existing laws and regulations need to be “climate proofed”. In the absence of effective implementation or missing political will or in the face of 7 (risk of) harmful climate impacts, courts have started to complement the legal picture. Climate litigation has become a wide-spread phenomenon in which citizens and interest groups are trying to hold governments and companies accountable for omissions or ineffective actions on climate change or the adverse effects thereof. Litigation and the turn to courts as a legitimate means to protect the atmosphere from excessive anthropogenic greenhouse gas emissions has so far largely been strategic in order to raise awareness and instigate government and business action. It may, however, hold the key for kicking real transformation into motion. Perhaps only when courts as the third pillar of power assume their rightful role in holding governments and companies accountable for their insufficient action on the climate challenge, change will change happen? In any case, it is perhaps safe to say that the role of law has, most likely, never been more important.

II. Challenges (and possibilities) for global governance and international law Coming back to the 2018 IPCC report, it tells in very clear terms what needs to be 8 done. Global net emissions need to get down to net zero around 2050 in order to keep global warming close to 1.5 degrees Centigrade.8 This means that fossil-fuel based emissions have to be entirely phased out in about 30 years. Thereafter, net emissions 6

IPCC 2018. Ibid, at C.2, p 17. 8 IPCC 2018, 12. 7

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have to be negative; meaning that we will have to pump more CO2 out of the air than what is being emitted. However, it stresses that this can only be achieved through transformative change: the fundamental system-wide re-organisation across economic, social and technological factors, including paradigms, goals and values.9 The IPCC specifies that these systems transitions are unprecedented in terms of scale, but not necessarily in terms of speed.10 In other words, we have done quick changes before, but never at this scale. All IPCC reports call on strengthening the global response and enhancing international cooperation. Climate change as a collective action problem can only be effectively addressed through transformative international governance: a system of intensifying international cooperation, coordination management and implementation support. Yet, there are several challenges: The spatial and temporal scales of climate change exceed time and territorial horizons of most ‘traditional’ governance arrangements, which challenges the ability to prepare for and respond to global and long-term changes. What is necessary are profound changes in governance arrangements that tackle complex risks across scales, jurisdictions, sectors, policy domains and planning horizons.11 In other words, there is a crucial role for international law and governance not only in creating a global level playing field that avoids free riding, but in creating the legal and systemic structure for a coordinated response commensurate with this global challenge. What would be the role of international law in bringing about transformative change? International law provides a starting point – but its shortcomings would have to be addressed. International environmental law consists of hundreds of treaties, but one important common denominator, highlighted by the UN Secretary General’s Report on ‘Gaps in International Environmental Law’, is the lack of effective implementation of those treaties.12 For example, the Nationally Determined Contributions (NDCs) of Parties to the Paris Agreement are not yet ambitious enough to reach the global temperature goal set up by that Agreement, but will need to progress and increase in their level of climate change mitigation ambition to the highest possible level every five years in order for Parties to collectively achieve the long-term temperature goals set out in article 2 of the Agreement.13 Lawyers will need to investigate the reasons for inadequate ambition and implementation. There can be many. There can be financial, technological or capacity constraints or the absence of political will or of effective enforcement regimes. Yet, there can be legal reasons, too. They can manifest themselves in inadequate or missing transformation and/or implementation of international obligations into national law; insufficient enforcement, conflicting legal norms or contestations in courts. Here, lawyers have an important role to play in creating and supporting the legal and regulatory environment for effective implementation; if necessary through courts! One should, however, be careful to not conflate the critique of inadequate implementation with the critique of the existing international law itself. For example, the problem with insufficient NDCs under the Paris Agreement is not the Agreement but the fact that its processes have not yet cranked in motion. In fact, progressively increasing the currently insufficient ambition of parties’ NDCs is the Agreement’s very raison d’être. 9

Ibid 6. IPCC 2018, 15. 11 IPCC 2019b, 34. 12 Gaps in International Environmental Law and Environment-related Instruments: Towards a Global Pact for the Environment – Report of the Secretary-General, UN Doc A/73/419 (30 November 2018). 13 UNEP, Executive summary. 10

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Climate change as a challenge for global governance, courts and human rights

The Paris Agreement is the most promising international agreement we have. Its nature is catalytic and facilitative and its processes iterative and coordinated in order to get states where they need to be – over time, together. Lawyers need to defend it, use it in international and domestic courts, base their legal arguments on it; in particular its goals, its principles of progression and the need to reflect highest possible ambition in NDCs.14 If the international legal community dismisses it, then we are shooting ourselves in the foot. There is no other comprehensive international climate agreement. It took states almost a quarter of a century to get there; it is very highly unlikely that there will be another one within the foreseeable future. At the very least, we need to give it a chance. Lawyers therefore need to use existing multilateral environmental agreements for all they are worth: promoting their relevance in the development, application and interpretation of laws, especially within other legal areas, such as trade, investment, human rights. Lawyers need to insist on their application in domestic legislation; as well as raise their importance in the international discourse, and claim their relevance in litigation in international and domestic courts. International law, of course, has yet to live up to the challenge of spurring global transformative change. Changes of a more fundamental character are necessary – in the longer run in order to bring about and support such change. The general structure of international law, including environmental law, is by its nature fragmented.15 Environmental issues are being dealt with by sectoral, issuespecific, largely isolated treaties, often spatially limited to specific regions. There is no overarching general framework which brings them together under the same normative umbrella and provides for a certain degree of coordination and coherence. Neither is there any tool that levels out the uneven playing field between short-term specific economic interest and the long-term, accumulative nature of environmental goals. This situation impedes the effectiveness of international law in solving environmental challenges.16 International environmental law perhaps more than any other field of international law, depends on coordination between its different parts – and other relevant international agreements – with the aim of creating coherence. The current situation sits uneasy with the temporal and spatial scale of environmental changes within the atmosphere, biosphere, cryosphere and hydrosphere – which consist of complex, interdependent and interconnected systems. In other words, it needs to a greater extent mirror the unchanging and universal laws of nature. It should therefore, at a minimum, a political and legal task to develop mutually supportive international goals and targets. These international targets and goals need to be kept under constant review, updated and kept in alignment with best available science. This means that they have to be dynamic; allowing for adjustment and refinement without lengthy negotiation processes. Mutually supportive international goals and targets would help decision-making and implementation at the national level, to adopt more holistic, integrated policies and measures, across scales, jurisdictions, sectors, policy domains and planning/budgeting horizons. 14 Paris Agreement articles. 2.1 and 4.3. See also, Voigt/Ferreira, ‘Dynamic Differentiation’: The Principles of CBDR-RC, Progression and Highest Possible Ambition in the Paris Agreement, (2016) 5 (2) Transnational Environmental Law 285. 15 Boyle/Redgwell, International Law and the Environment, Oxford University Press, 4th ed, 2019); Sands et al., Principles of International Environmental Law, Cambridge University Press, 4th ed, 2018; Bodansky, The Art and Craft of International Environmental Law, Harvard University Press, 2011; Bodansky/Brunnée/Hey (eds.), The Oxford Handbook of International Environmental Law, Oxford University Press, 2008. 16 See supra (fn. 12), Summary.

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In developing cross-sectoral approaches and goals complex risks need to be tackled. This requires that direct and indirect, distant and cumulative impacts need to be taken into account. In the face of complexity and uncertainty, this might require pre-emptive and precautionary actions in regulation and management to avoid, mitigate and restore the deterioration of nature and climatic stability. Important is also that international standards and goals, can be broken down to national, sub-national and even individual action; that they are easily understandable, measurable, implementable and reportable. In developing such goals and corresponding policies and measures, there needs to be better and stronger inclusion of the voices of vulnerable and affected communities, especially effective participation of indigenous peoples, youth and future generations. But, simply setting new targets is not enough if they are not met. These targets need to translate into adequate and effective action. There is therefore an urgent need for more coordinated and concerted implementation structures. International law needs to give clear guidance to states on how to improve their individual and collective performance. In order to spur states into coordinated actions, international law has to be catalytic and facilitative in nature and create conditions under which parties progressively and with a certain degree of flexibility reduce their impact on natural systems through coordinated, iterative policy shifts. This takes time – but in the absence of clear, binding standards, at a minimum, states already have a legal duty: they must act with due diligence in avoiding environmental harm to other states’ territories and to areas beyond any jurisdiction. Accordingly, each state must apply its best effort and take all appropriate and adequate measures according to its capabilities and, in proportion to the risk of environmental harm, in addressing an environmental concern.17 This standard of care already is international law and the development of most future obligations in international environmental law will, in one form or the other, be based on it. Other steps, as identified in the report by the UN Secretary General, would be to increase the coordination between different regimes by (i) creating cooperation between conventions; (ii) mapping of existing global and regional action plans and agreements to create an overview of coverage and identify inter-linkages; (iii) using the same reporting channels for reporting and/or monitoring processes (‘integrated reporting’); and (iv) sharing of lessons-learned and best practices among regimes. Potential conflicts between treaty regimes can further be managed by using legal means of conflict clauses, mutual supportiveness, or the application of the interpretive principle of ‘systemic integration’ contained in Article 31.3(c) of the Vienna Convention on the Law of Treaties.18 Importantly, international law needs to strongly draw private actors into its force field and to set out new frameworks for private sector investment and innovation. This would need to include fundamental reforms of economic and financial systems, including subsidies and taxes, incentive programs, how to spur innovations, patents etc. Trade agreements and commodities and derivative markets should be reformed to be able to react to the challenges generated by displacement of unsustainable consumption and production, and need to decouple improvements in well-being (economic or 17 See, e.g., International Law Association, Due Diligence in International Law (Reports), available at http://www.ila-hq.org/index.php/study-groups; see also Kulesza, Due Diligence in International Law, Brill Nijhoff, 2016. See also, in the context of the Paris Agreement: Voigt, The Paris Agreement: What is the standard of conduct for parties?, Questions of International Law (24 May 2016), available at http://www. qil-qdi.org/paris-agreement-standard-conduct-parties/. 18 See supra (fn. 12), 83.

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not) from fossil fuel use, land use and conservation, pollution and unsustainable economic growth.19 This requires not only the internalization of external environmental costs. In fact, it requires rethinking of the concept of economic growth and its legal underpinnings. Economic development needs to be sustainable. Unchecked growth, for growth’s sake, is not. But international law is tightly knit to the current conventional paradigm of unfettered economic growth – which is the cause of most environmental problems. We will have to rethink which elements of the international legal system are fit for a transformative change, which need to be reformed – and which need to be discharged. Some principles and even laws and treaties might not be fit for purpose. This future of international law is one where it guides the sustainable development of resilient ecological, social, and economic systems in the face of uncertainty and complexity, while taking account of global differences in challenges and needs as well as global inequalities. In-built flexibility, system-science based goals and dynamic developments based on principles such as progression and highest ambition, are some of the features that international law might have to exhibit in order to remain relevant and effective. Eventually, international law would need to unite and guide actors, public and private, in the system-wide re-organization and reformation across sectors and borders to promote (and enforce) global sustainable development within the boundaries set by the thresholds of the atmosphere, biosphere and hydrosphere thresholds. This does not only apply to the silo of international environmental law – but needs to inform and be integrated into all areas of international regulation, including trade, investment, data protection, human rights etc. Given the slow pace of international negotiation processes and the protection of vested, sovereign or commercial interests, these suggestions might sound somewhat utopian. But rather than being an apology for the status quo of international affairs, international law and law-makers can, should and must aspire to create a better, sustainable world – in the same spirit which informed the drafters of the UN Charter. The path towards transformative change is not an easy one, but the alternative is worse; much worse.

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III. The role of courts The current groundswell of climate litigation is complementing the picture of 35 governance challenges – and possibilities. There are, at least, three possible scenarios where courts come into the climate picture.

1. Addressing the causes of climate change The first concerns increased action addressing the causes of climate change through 36 the reduction of GHGs (“mitigation”). In this context, in many cases worldwide plaintiffs are seeking to hold governments accountable to legislative and policy commitments (nationally or internationally) to reduce GHG emissions or increase removals.20 19 See for an account of the interaction between the Paris Agreement and the international trade regime: Das/van Asselt/Droege/Mehling, Towards a Trade Regime that Works for the Paris Agreement, Economic&Political Weekly, Vol. 54, Issue No. 50, 21 December 2019. 20 Recent examples include: Commune de Grande-Synthe v France (2019), where the municipality of Grande-Synthe sued the French government for insufficient action on climate change. The suit was filed in January 2019 in the Conseil d’Etat, the highest administrative court in France. Another case, Notre Affaire à Tous v France, was filed by non-profit organisations. An example from Ireland is Friends of the

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Over the last decade, laws codifying national and international responses to climate change have grown in number, specificity, and importance. As these laws have recognised new rights and created new duties, litigation seeking to challenge either their validity or their particular application has followed. So too has litigation aimed at pressing legislators and policymakers to be more ambitious in their approaches to climate change. In addition, litigation seeking to fill the gaps left by legislative and regulatory inaction has also continued. Plaintiffs in these cases are mainly sub-state (municipalities) or non-state actors (individuals or organisations). 37 The most prominent case so far is Urgenda Foundation v State of the Netherlands.21 In 2015 Urgenda, a Dutch environmental group, sued the government of the Netherlands in the Hague District Court to require the state to increase its level of climate change mitigation ambition. The court ordered the state to limit GHG emissions to 25 % below 1990 levels by 2020, finding the government’s existing pledge to reduce emissions by 17 % insufficient to meet the state’s fair contribution toward the goal of keeping global temperature increases within two degrees Centigrade of pre-industrial conditions. The court concluded that the state has a duty of care to take climate change mitigation measures due to the “severity of the consequences of climate change and the great risk of climate change occurring”. The Dutch government submitted 29 grounds of appeal. On 9 October 2018, the Hague Court of Appeal upheld the District Court’s ruling, concluding that by failing to reduce greenhouse gas emissions by at least 25 % by the end of 2020, the Dutch government is acting unlawfully in contravention of its duty of care under arts 2 and 8 of the European Convention on Human Rights (ECHR).22 The court recognised Urgenda’s claim under art 2 of the ECHR, which protects a right to life, and art 8 of the ECHR, which protects the right to private life, family life, home, and correspondence. The Dutch government appealed the decision and the Dutch Supreme Court upheld in 2019 the judgment of the District Court.23 38 The legal bases of current climate claims differ. Some are based on violation of international law, while most legal bases are domestic laws, non-contractual obligations (especially the duty of care and public trust doctrine) and constitutional law. Others claim a human rights based due diligence requirement to adopt all appropriate measures to prevent infringements. In the Urgenda case, for example, the Supreme Court based its finding on the protection of human rights of the ECHR. It states that “the ECHR requires the states which are parties to the convention to protect the rights and freedoms established in the convention for their inhabitants. Article 2 ECHR protects the rights to life, and Article 8 ECHR protects the right to respect for private and family life. … [A] contracting state is obliged by these provisions to take suitable measures if a real and immediate risk to people’s lives or welfares exists and the state is aware of that risk.”24 39 Importantly, the Court noted that when determining suitable measures, account needs to be taken of the magnitude and immediacy of the risk. Where environmental Irish Environment v Ireland (2019). Friends of the Irish Environment filed suit in the High Court, arguing that the Irish National Mitigation Plan, which seeks to cut emissions by 80 % by 2050 compared to 1990 levels, is not “fit for purpose” because it is not designed to achieve substantial emissions reductions within the next few decades. The case was argued before the High Court on 22 January 2019. 21 Urgenda Foundation v State of the Netherlands (Ministry of Infrastructure and the Environment), judgment of 24 June 2015, Rechtbank Den Haag C/09/456689/HA ZA 13-1396. 22 State of the Netherlands (Ministry of Infrastructure and the Environment) v Urgenda Foundation, judgment of 9 October 2018, Gerechtshof Den Haag ECLI:NL:GHDHA:2018:2610; 200.178.245/01. 23 The State of the Netherlands v Stichting Urgenda, Hoge Raad (Supreme Court of the Netherlands) Number 19/00135, judgment of 20 December 2019, ECLI:NL:HR:2019:2007. 24 Ibid.

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hazards threaten large groups or the population as a whole – as it was found in the case of climate impacts – the obligation requires to apply measures even if the risk only materializes over the long term. Suitable measures are those that are not impossible or disproportionately economically burdensome, and need to be suitable to avert the imminent hazard as much as reasonably possible. In determining the obligation of the Netherlands, the Court focused primarily on the obligation of each state to do “its part”.25 In this context the Court stated that “each country is responsible for its own share… a country cannot escape its own share of the responsibility to take measures… in proportion to its share.” It appears that the Court defined this share by the nature and scope of the risk, as well as the specific capability, responsibility and possibility of the state to act. In other cases, litigants are making arguments for climate action based on the public trust doctrine, which assigns the state responsibility for the integrity of a nation’s public trust resources for future generations.26 Such claims raise questions of individuals’ fundamental rights and intergenerational equity, as well as concerns about the balance of powers among the judicial, legislative and executive branches or functions of governments. Not only governments are being held accountable to climate mitigation measures. Also private companies, responsible for the extraction of fossil fuels, are starting to be at the centre of court action. Recently, Milieudefensie (Friends of the Earth) Netherlands, an environmental organisation, and co-plaintiffs launched a court summons alleging Shell’s contributions to climate change violate its duty of care under Dutch law and human rights obligations. The case was filed in The Hague Court of Appeals on 5 April 2019. The plaintiffs seek a ruling from the court that Shell must reduce its CO2 emissions by 45 % by 2030 compared to 2010 levels and to zero by 2050, in line with the Paris Agreement.27 This case builds on the landmark Urgenda decision. In the suit against Shell, plaintiffs extend this argument to private companies, arguing that given the Paris Agreement’s goals and the scientific evidence regarding the dangers of climate change, Shell has a duty of care to take action to reduce its greenhouse gas emissions. Plaintiffs base this duty of care argument on art 6:162 of the Dutch Civil Code as further informed by Articles 2 and 8 of the ECHR, which guarantee right to life (art 2) and private life, family life, home, and correspondence (art 8). They outline how Shell’s long knowledge of climate change, misleading statements on climate change, and inadequate action to reduce climate change help support a finding of Shell’s unlawful endangerment of Dutch citizens and actions constituting hazardous negligence. In many of these cases, the provisions of the Paris Agreements, most prominent the global temperature threshold included in article 2.1(a), as well as the normative expectations of progression and highest possible ambition (article 4.3) are applied in order to interpret existing national laws and regulations, to determine the obligation of conduct or to fill normative gaps. For example, Justice Brian Preston of the New South Wales Land and Environment Court in the landmark judgment Gloucester Resources Limited v Minister for Planning 25

Ibid, paras 7.1–7.3.6. The most prominent case based on the Public Trust Doctrine currently is Juliana v United States of America. This case is based on action by several young plaintiffs asserting that the federal government violated their constitutional rights by causing dangerous carbon dioxide concentrations. For an overview of the case, see http://climatecasechart.com/case/juliana-v-united-states/. 27 See Summons Vereniging Milieudefensie, Stichting Greenpeace Nederland, Stichting ter bevordering van de Fossielvrij-beweging, Landelijke Vereniging tot Behoud van de Waddenzee File and others to Royal Dutch Shell plc, number 90046903, 5 April 2019, available at http://blogs2.law.columbia.edu. 26

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Introduction

referred frequently to the Paris Agreement. When upholding the refusal to consent to the Rocky Hill Coal Project, he stated: “No new fossil fuel development is consistent with meeting the Paris accord climate targets … Meeting the Paris accord climate targets means that not only must currently operating mines and gas wells be closed before their economic lifetime is completed, but also that no approved and no proposed fossil fuel projects, based on existing reserves, can be implemented … The exploitation and burning of a new fossil fuel reserve, which will increase GHG emissions, cannot assist in achieving the rapid and deep reductions in GHG emissions that are necessary in order to achieve ‘a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of this century’ (Article 4(1) of the Paris Agreement) or the long term temperature goal of limiting the increase in global average temperature to between 1.5ºC and 2ºC above pre-industrial levels (Article 2 of the Paris Agreement).”28 This is just one example of how international law can be used and its relevance be strengthened in judicial proceedings in national courts. 44 Another example of the increasing legal relevance of the Paris Agreement are the references made to it in other areas of international law, such as human rights law. In a recent joint statement, five UN Human Rights Treaty Bodies called upon states that “[i]n order…to comply with their human rights obligations, and to realize the objectives of the Paris Agreement, they must adopt and implement policies aimed at reducing emissions, which reflect the highest possible ambition [article 4.3], foster climate resilience and ensure that public and private investments are consistent with a pathway towards low carbon emissions and climate resilient development.29 In other words, articles 2.1 and 4.3 of the Paris Agreement together are being used to determine the substance of human rights obligations – the standard of care – with respect to climate change. 45 Similarly, in a 2019 communication to the UN Committee on the Rights of the Child, the petitioners (16 children and youths) claim that international human rights obligations are informed by the rules of international environmental law, and that the Convention on the Rights of the Child must be interpreted taking into account the respondents’ obligations under international law.30 Accordingly, they argue that the respondents (i.e. Brazil, Argentina, Germany, France and Turkey) by not reducing their emissions at the “highest possible ambition” according to article 4.3 of the Paris Agreement, have failed to comply with their human rights obligations.31 Reducing emissions at the level of highest possible ambition, they claim, implies inter alia using maximum available resources.32 This amounts to a due diligence standard for complying with human rights obligations, according to which states must take all appropriate measures to address climate change and its adverse effects, employ their best efforts or, simply, do “as well as they can”.33 28

Gloucester Resources Limited v Minister for Planning (2019) NSWLEC 7, 446–448. Committee on the Elimination of Discrimination Against Women, Committee on Economic, Social and Cultural Rights, Committee on the Protection of the Rights of All Migrant Workers and Members of their Families, Committee on the Rights of the Child, and Committee on the Rights of Persons with Disabilities, Joint Statement on “Human Rights and Climate Change” (16 September 2019) http://https:// www.ohchr.org/en/NewsEvents/Pages/DisplayNews.aspx?NewsID=24998&LangID=E. 30 Communication to the Committee on the Rights of the Child in the case of C. Sacchi et al. v. Argentina, Brazil, France, Germany and Turkey (23 September 2019), paragraphs 14, 174, 182. 31 Ibid 20. 32 Ibid 178. 33 Voigt, The Paris Agreement: What is the standard of conduct for parties?, Questions of International Law (24 May 2016), available at http://www.qil-qdi.org/paris-agreement-standard-conduct-parties/. 29

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Another interesting development which might have significant implications has 46 recently been made by the Inter-American Court on Human Rights (IACtHR). On 7 February 2018, the Court issued an Advisory Opinion (AO) on Environment and Human Rights which is a potentially significant decision in its series of high-profile international judicial rulings, which acknowledge legal consequences for environmental harm. In its AO on Environment and Human Rights, the Court focused on state obligations under international environmental law and human rights law in a transboundary context, in particular as concerns the construction and operation of infrastructure mega-projects, petroleum exploration and exploitation, maritime transportation of hydrocarbons, construction and enlargement of ports and shipping canals. The AO has been characterised as a landmark pronouncement in several respects.34 It 47 is the Court’s first pronouncement on state obligations concerning environmental protection under the American Charter on Human Rights (§ 46). Indeed, it is the first-ever ruling by an international human rights court that truly examines environmental law as a systemic whole, as distinct from isolated examples of environmental harm analogous to private law nuisance claims. It has been noted:35 48 “Perhaps most importantly, it is a landmark in the evolving jurisprudence on ‘diagonal’ human rights obligations, i.e. obligations capable of being invoked by individual or groups against States other than their own. The AO opens a door – albeit in a cautious and pragmatic way – to cross-border human rights claims arising from transboundary environmental impacts.” Under existing international law, it was unclear whether a state may be obliged to 49 require multinationals domiciled in its territory to adopt, at the headquarters level, policies and frameworks to ensure that subsidiaries or supply chain partners in the Global South do not infringe human rights in their places of operation. The reasoning in the AO supports such obligation at a general level. This has been done with great care in balancing between the fundamental nature of the right to a healthy environment as a necessary condition for enjoyment of human rights generally, and continuing to treat extraterritorial obligations and claims as “exceptional”. Although the IACtHR in its AO does not address climate change, some of the Court’s 50 observations on states’ duties are clearly relevant in a climate context. It was noted that the findings in the AO:36 34 Vega-Barbosa/Aboagye “Human Rights and the Protection of the Environment: The Advisory Opinion of the Inter-American Court of Human Rights” EJIL:Talk!, 26 February 2018, available at www.ejiltalk.org (accessed 24 April 2019). 35 Feria-Tinta, The Rise of Environmental Law in International Dispute Resolution: Inter-American Court of Human Rights issues Landmark Advisory Opinion on Environment and Human Rights, EJIL. Talk!, 26 February 2018, available at www.ejiltalk.org (accessed 24 April 2019). 36 Ibid. For comparison and discussion of the ICJ case and the Advisory Opinion of the IACtHR, see Desierto, Environmental Damages, Environmental Reparations, and the Right to a Healthy Environment: The ICJ Compensation Judgment in Costa Rica v Nicaragua and the IACtHR Advisory Opinion on Marine Protection for the Greater Caribbean, EJIL:Talk!, 14 February 2018, available at www.ejiltalk.org (accessed 3 June 2018). Desierto notes, critically: “The Court’s reasoning in its Judgment on compensation nowhere surveys the considerably evolved scientific landscape on short-term and long-term environmental damages assessment for complex environmental phenomena such as biodiversity, energy, air quality, and raw materials — as well as the climate change impacts that will also be felt in the affected area. This would have been a far more visionary Judgment — emulating the scientific bases for interlocking State responsibilities for prevention, remediation, and mitigation that were recognised in the IACtHR’s Advisory Opinion — had the Court at least transparently discussed the evidence before it and any use it made, if any, of the highly developed scientific resources of the international community today.”

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Introduction

“… are clearly pertinent to this ultimate example of transboundary harm. Moreover, the Court’s reasoning on the ‘jurisdiction’ issue could be used to support an argument that a State’s contribution to the accumulation of greenhouse gases in the atmosphere should result in State responsibility and accountability under the [American Convention on Human Rights] ACHR to victims living in other States, e.g. persons whose lands have become submerged or uncultivable due to rising sea levels.”

2. Addressing the consequences of climate change 51

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A second set of cases addresses the consequences or harmful effects of climate change by either establishing liability for failures to adapt to climate change, or by establishing that particular emissions are significant enough to be a proximate cause of particular adverse climate change impacts. Warming of 1.5 degrees Centigrade or more will have impacts and many of them can already be perceived: sea level rise (causing land inundation, soil salination); wilder, wetter and warmer weather, intensified droughts (causing crop failures, wild fires, fresh water dry outs), erosion, impacts on species and ecosystems etc. For this reason, adaptation to the consequences will be necessary and plans and laws on this need to be in place. Yet, not all effects can be avoided. Losses might occur due to crop failure because, for example, of droughts or damage to properties because of landslides or flash floods. The costs to governments, private actors, communities and individuals dealing with these impacts are already and will be even more significant. While none of this is new, the predicted magnitude, increased intensity, frequency and likelihood certainly are. Technical understanding of climate change and the quality of predictions about future temperature and weather patterns are improving. Recognising that adaptation efforts have not kept pace with these improvements, litigants are already bringing claims that seek to assign responsibility where failures to adapt result in foreseeable, material harms and the prospect of further litigation is rising. Building on scientific understanding of the relationship between GHG emissions and climate change, which policymakers (with notable exceptions) have generally adopted as accurate, several cases seek to establish liability for entities that generate emissions with full knowledge of those emissions’ effects on the global climate and on people and ecosystems. An interesting example is the case Lliuya v RWE AG.37 In November 2015 Saúl Luciano Lliuya, a Peruvian farmer who lives in Huaraz, Peru, filed claims for declaratory judgment and damages in a German court against RWE, Germany’s largest electricity producer. Lliuya alleged that RWE, having knowingly contributed to climate change by emitting substantial volumes of greenhouse gases, bore some measure of responsibility for the melting of mountain glaciers near his town of Huaraz, Peru. That melting has given rise to an acute threat: Palcacocha, a glacial lake located above Huaraz, has experienced a substantial volumetric increase since 1975, which has accelerated since 2003. Lliuya presented several legal theories in support of his claim, including one that characterised RWE’s emissions as a nuisance that Lliuya had incurred compensable costs to mitigate. Acknowledging that RWE was only a contributor to the emissions responsible for climate change and thus for the lake’s growth, Lliuya asked the court to order RWE to reimburse him for a portion of the costs he and the Huaraz authorities had incurred to establish flood protections. That portion was 0.47 % of the total cost – the same percentage as Lliuya’s estimate of RWE’s annual contribution to global greenhouse gas emissions. 37

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Lliuya v RWE AG Case No 2 O285/15 Essen Regional Court, on appeal.

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The court dismissed Lliuya’s requests for declaratory and injunctive relief, as well as 56 his request for damages. The court noted that it could not provide Lliuya with effective redress (Lliuya’s situation would not change, the court said, even if RWE ceased emitting), and that no “linear causal chain” could be discerned amid the complex components of the causal relationship between particular greenhouse gas emissions and particular climate change impacts. On 30 November 2017, the appeals court recognised the complaint as well-pled and 57 admissible. The case will move forward into the evidentiary phase to determine whether Lliuya’s home is (a) threatened by flooding or mudslide as a result of the recent increase in the volume of the glacial lake located nearby, and (b) how RWE’s greenhouse gas emissions contribute to that risk. The court will review expert opinion on RWE’s emissions, the contribution of those emissions to climate change, the resulting impact on the Palcaraju Glacier, and RWE’s contributory share of responsibility for causing the preceding effects. While the facts of this case must still be adjudicated, the court’s recognition that a private company could potentially be held liable for the climate change related damage of its greenhouse gas emissions marks a significant development in law. In another example, in Leghari v Federation of Pakistan, an appellate court in 58 Pakistan granted the claims of Ashgar Leghari, a Pakistani farmer, who had sued the national government for failure to carry out the National Climate Change Policy of 2012, especially when it came to adaptation action, and the Framework for Implementation of Climate Change Policy (2014–2030). On 4 September 2015 the court determined that “the delay and lethargy of the State in implementing the Framework offend the fundamental rights of the citizens”.

3. Response measures to climate change There is also a third category. The measures taken to respond to the climate crisis, 59 either on mitigation or on adaptation will also have impacts. Overly restrictive regulation might be claimed to amount to expropriation, or unequal treatment or forfeiture of legitimate expectations or loss of revenue, especially by carbon or energy-intensive companies. One example is the claim brought by Vattenfall, a Swedish energy firm, in 2009. 60 Vattenfall launched its investor-state claim against Germany, arguing that new environmental regulation amounted to an expropriation and a violation of the obligation to afford foreign investors “fair and equitable treatment” and claimed $1.9 billion under the Energy Charter Treaty. Vattenfall’s claim concerned permit delays for a coal-fired power plant in Hamburg.38 61 After the company litigated in domestic courts, the coalition government issued the permits, but with additional requirements to protect the Elbe River. Rather than comply with these requirements, Vattenfall launched its investor-state compensation claim against Germany. To avoid the uncertainty of a prospective investor-state tribunal ruling ordering payment of a massive amount of compensation, the German government reached a settlement with Vattenfall in 2010.39 The settlement obliged the Hamburg government to drop its additional environmental requirements and issue the contested permits required for the plant to proceed.40

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See the request for arbitration at www.italaw.com. Agreement between Vattenfall and the Federal Republic of Germany can be accessed at www.italaw.com. 40 Vattenfall AB v Federal Republic of Germany ICSID Case No ARB/12/12. 39

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Meanwhile, the German Constitutional Court found that Germany’s law to exit nuclear power did not amount to an unconstitutional expropriation, as claimed by several nuclear power companies.41 63 Under these and other scenarios, there might be a turn to courts in seeking to address the economic and social side effects of regulation – for example, workers that get laid off due to the closure of a carbon or energy intensive installation, or environmental side effects, for example, birds that get killed by wind turbines. These cases might involve a difficult balancing of various objectives and can lead to sensitive legal and political decisions. As with the example of Vattenfall and Germany, the threat of massive compensation claims might exert enough political and economic chill to influence legislators and decision-makers. 64 In this situation, it is to be expected that courts will be forced to take legal decisions with political implications. A development of more active European courts would mirror to a larger extent the action by American courts. 62

IV. Major legal issues There are several main legal issues that tend to be disputed among the parties involved in climate change litigation. Interestingly, climate cases hold a number of particular challenges that are not (all) present in other areas of law. 66 First, the main objective of a climate claim may be to prevent, rather than seek redress for, environmental harm. Avoiding harm from occurring, however, might apply only within a small window of time. Consequently, environmental cases might be more time sensitive than other cases; a situation that sits uneasily with the slow-motion nature of national, and in particular international adjudication. 67 Second, there are difficulties in quantifying environmental harm once it has occurred. In general, courts have recognised material and moral damage, including environmental damage, as long as it is financially assessable. For a long time, however, the question of whether courts would support the idea that environmental damage also encompasses damage to the intrinsic value of the environment, beyond resources of a direct economic value, remained an open one. Only recently has the ICJ started to evaluate environmental harm in Certain Activities Carried Out by Nicaragua in the Border Area (2018).42 However, the final amount of compensation assessed against Nicaragua fell significantly short of what Costa Rica had demanded. The case is nonetheless an important precedent for recognising conservation interests and ecosystem services; yet the question of how to quantify environmental harm is still far from settled. 68 Third, environmental cases rely on scientific evidence of causality and effects: for example, which pollutants have which effects on the ecosystem, animal or plant life or health. The science can be complex or unsettled. There might be uncertainties and loopholes. In addition, there could be challenges in securing scientific experts who are willing to speak against vested commercial interests. Also, in most cases judges are trained in law and are not experts in natural sciences. There is a need to translate complex technical data into a language that is accessible to judges. The challenge with respect to climate change is accumulated emissions (over a long time and by many emitters). Here the question is whether science and legal theory and practice are able to 65

41 Bundesverfassungsgericht, judgment of 6 December 2016, 1 BvR 2821/11 1 BvR 321/12 1 BvR 1456/12, available at www.italaw.com. 42 Certain Activities Carried Out by Nicaragua in the Border Area (Costa Rica v Nicaragua) Compensation Owed by the Republic of Nicaragua to the Republic of Costa Rica (2018), available at www.icj-cij.org.

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develop approaches that can deal with this kind of challenge. Environmental judicial practice provides some examples of how this has been done and which challenges exist. One suggestion could be to establish causation on the sole basis of contribution to the problem of climate change from a specific actor.43 It could also be argued that significant emitters of GHGs have knowingly increased the risk of damage by contributing to increased concentrations of GHGs in the atmosphere – or that any such contribution amounts to a violation of due diligence/duty of care.44 Fourth, there is the issue of justiciability, that is, the question of the plaintiff’s standing, legal interests and the court’s role relative to that of the government’s other branches: For example, the separation of powers principle was addressed by The Hague District Court in the Urgenda case. The court found that Dutch law actually requires the judiciary to assess the actions of political bodies when the rights of citizens are at stake, even if the resolution of the case has political outcomes. The court explained that Urgenda’s claim “essentially concerns legal protection [of rights]”. Fifth, there is the question of sources of climate obligations and the standard of care. Climate change litigation can draw on various sources of legal authority, including constitutional provisions (in particular a right to a clean and healthy environment), statutory law (for example, Endangered Species Act, Environmental Impact Assessment), common law (tort, nuisance, negligence), or others (duty of care, Public Trust Doctrine). They may also draw on international law (for example, human rights law, the United Nations Framework Convention on Climate Change and the Paris Agreement). In some cases, plaintiffs identify more than one of these, or a combination of them, as providing the legal basis for their claims. The standard of care entailed in the obligations, once identified, is another question. For example, with the Paris Agreement the question is what exactly Parties are required to do in terms of addressing the climate challenge. Many claim that the Paris Agreement takes a “bottom up” approach. However, this is not entirely the case. While the national climate contributions (called: nationally determined contributions) are self-determined by governments, the agreement is not silent on what and how much needs to be done. A “direction of travel” is provided by the goals of holding global temperature increases to well below 2 degrees Centigrade and pursuing action to limit it to 1.5 degrees as expressed in art 2.1(a) of the Agreement. This is an important guidance which not only has informed national actions worldwide, but has (together with the goal of “carbon neutrality by the middle of this century” (art 4.1)) in many cases been reflected and incorporated into national laws. Importantly, the Agreement is not entirely a “bottom up” instrument also because it sets out normative parameters which provide for an international “pull” and which determine the legal standard of care now to be exercised in climate affairs. Those parameters are not legally binding per se, but nevertheless exert normative force. One, as already mentioned above, is the duty of care – as a standard of conduct – that is expressed in the requirement that each Party’s NDC will reflect its highest possible ambition (Paris Agreement, art 4.3), in a manner that reflects its responsibilities and respective capabilities. This provision expresses the legal expectation that Parties will deploy their best efforts in setting their national mitigation targets and in pursuing domestic measures to achieve them. This sets for each Party the standard of conduct to

43 Verheyen, Climate Damage and International Law: Prevention Duties and State Responsibilities, Martinus Nijhoff, 2005. 44 Voigt, in: Carlarne/Grey/Tarasofsky (eds.) Oxford Handbook of International Climate Change Law, Oxford University Press, 2016, 464–494.

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do as well as it can, to deploy adequate means, to do its utmost. In this lies an important aspect of global climate justice; an aspect which has yet to be recognised and utilised. This is a due diligence standard, well known in international and national law, which requires each government to take all adequate and appropriate measures at its disposal.45 It means, at the minimum, that Parties need to set their highest possible mitigation target at a level that is not economically disproportionately burdensome or impossible to achieve. It also requires Parties to have domestic measures in place that are necessary, meaningful and, indeed, effective means to achieve that target.46 Such a target should be comprehensive and based on a thorough assessment of mitigation options in all relevant sectors. Parties would need to deploy all political, legal, socio-economic, financial and institutional capacities and possibilities in defining such target, implementing it through adequate laws and regulations and enforcing it. Moreover, Parties would need to plan their climate strategies holistically and within a long-term timeframe.47 Acting with due diligence requires of a government to act in such a way or to use such care that governments in the same situation may reasonably be expected to exert in matters of international interest and obligation. It also implies that governments act in proportion to the risk to which they might be exposed:48 “The required degree of care is proportional to the degree of hazard involved. … The higher the degree of inadmissible harm, the greater would be the duty of care required to prevent it.”49 As has been noted, the standard of due diligence requires “nothing more nor less than the reasonable measures which a well-administered government could be expected to adopt under similar circumstances”.50 This is an “objective” assessment criterion. It has however been rejected by several scholars, and arbitrators, which have instead relied on the “subjective due diligence standard”, taking into consideration the means at the disposal of the state, and the specific circumstances present in the state.51 Arguably, these two elements are not so easily separated. The standard is primarily an objective one. However, both for the assessment of “reasonableness” and for the determination of “similar circumstances”, Parties’ specific circumstances would need to be taken into account. In other words, each successive NDC has to contain a Party’s highest level of ambition – it must do as well as it can in order to progressively achieve the objective of the agreement, that is, keep the increase in global temperature well below 2 degrees Centigrade and pursue efforts to limit such increase to 1.5 degrees Centigrade. Moreover, a Party’s changing circumstances (for example, a financial or economic crisis) cannot be used as a legal excuse for reducing its “highest possible ambition” compared to the level contained in the previous NDC. In order to avoid a decrease in ambition level, the progression principle in art 4.3 has a significant role to play. It not only sets a “floor” for the next NDC, but requires each Party to go above and beyond each previous NDC. The impact of “progression” can be likened to the non-regression principle known in human rights law. There it requires that norms which have already been 45 Voigt/Ferreira ‘Dynamic Differentiation’: The Principles of CBDR-RC, Progression and Highest Possible Ambition in the Paris Agreement, (2016) 5(2) Transnational Environmental Law 285–303. 46 Ibid. 47 This expectation is also covered in art 4.19, according to which Parties should strive to formulate and communicate long-term low greenhouse gas emissions development strategies. 48 See, for example, the first report of the ILA Study Group on Due Diligence in International Law, 7 March 2014, www.ila-hq.org. 49 Crawford, Commentary on Draft Articles on State Responsibility, Oxford University Press, 1999, at 18. 50 Freeman, Responsibility of States for Unlawful Acts of their Armed Forces, (1955-II) 88 Recueil des Cours de l’Academie de Droit International de la Haye 263 at 277–278. 51 Newcombe/Paradell, Law and Practice of Investment Treaties: Standards of Treatment, (2009), at 310, 6.44. See also Koivurova, Due Diligence, in: Max Planck Encyclopedia of Public International Law, Oxford University Press, 2013.

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adopted by states cannot be revised, if this implies backtracking on the standard of protection of collective or individual rights. However, the principle of progression in the Paris Agreement is stronger than that: it implies increasing the level of ambition – not just keeping it at the same level! It is the combination of both legal elements – progression and highest possible 78 ambition – that determines the duty of care to be expressed in Parties’ nationally determined contributions: “Highest possible ambition” means to act with the level of care that can be expected from a good government in similar circumstances (“the best in class”) when aiming to match ambition with the overall temperature goal of the Paris Agreement, and “progression” to ensure that Parties do not only not divert from earlier ambition levels, but continue to increase such levels for every successive NDC. Sixth, bringing a claim before a court also involves issues around cost and time. 79 Affected individuals or communities may not have access to the resources usually available to corporate culprits or state actors, raising the question of access to justice. These are only some of the circumstances that make the study of judicial environ- 80 mental practice relevant. In order to grasp judicial practice on the environment, however, it is necessary to investigate the many various ways and means by which different courts and quasi-judicial bodies could deal and already address climate claims. This necessitates the study of different national, regional and international courts and tribunals, as well as a large variety of cases and claims. By learning from each other, courts can establish a global discourse “language” and influence – and, eventually a cross-fertilisation of legal arguments and reasoning which may help to overcome barriers and make the judiciary fit for purpose.

V. Potential role for litigation in national courts As mentioned above, the twin principles of “highest possible ambition” and “progres- 81 sion” could be used as a legal standard for assessing the adequacy of government action. Such standard of care has been shown to comprise an element of proportionality, including an equitable balancing of interests. Although a heavy burden of proof is placed on the plaintiff which has to establish a failure to act with due diligence by a state, this is not impossible. It was in this similar vein that the Hague District Court in the Urgenda case found 82 that the State of the Netherlands had violated its duty of care – a standard analogous to the due diligence standard in international law – by defining an insufficient climate mitigation target. By finding that a mitigation target of 25 % and higher (as compared to the initial target of 20 %) would not be economically disproportionately burdensome or impossible for the Netherlands, the Court concluded that by adopting a mitigation target below the range of 25–40 %, the state had failed to fulfil its duty of care, acted negligently and therefore unlawfully.52 In another example, the plaintiffs in Greenpeace v Norway also attempted to rely on 83 this provision to “fill in context” to the constitutional provision that “everybody has a right to an environment that is conducive to health” and that natural resources shall be managed based on long-term considerations and rights for future generations. Here, the Oslo District Court and the Court of Appeal denied that there was a violation of a 52 Urgenda Foundation and 886 citizens v State of the Netherlands [2015] C/09/456689/HA ZA 13–1396. An English translation of the decision is available at http://uitspraken.rechtspraak.nl/inziendocument?id=ECLI:NL:RBDHA:2015:7196, paras 4.52–4.93, in particular para. 4.86.

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constitutional provision. The decision is currently under appeal to be decided by the Supreme Court in late 2020. To sum up, these legal standards could be used to shape and interpret domestic laws and policies and to measure whether the appropriate care was applied. They can and should be used to shape and interpret domestic laws and policies in the context of climate justice. Moreover, national (and international) courts can and should play an important complementary role by using these parameters as supporting legal arguments or as a tool for statutory interpretation. They can even be used as a standard of review; a legal standard for assessing the adequacy of national laws and policies. The cases mentioned above are examples of a “turn to courts”, in as much as they are a challenge and chance for courts – and judges – to define, redefine or strengthen their role in the national and global international order in the global, urgent, and most important fight against dangerous climate change. The cases mentioned in this article are not exhaustive. They are only examples of a long and wide list of climate litigation. We have not seen the end of it; perhaps just the beginning. There are several reasons for this expectation. First, there is the growing urgency of addressing climate change as well as the fact that as impacts become more severe and frequent, this suggests more climate-related litigation to come. It is a complex, super-wicked problem and requires “all hands on deck”, including all branches of government, to protect citizens’ and nature’s rights. Second, many states are in the process of enacting more climate and energy related laws and regulation, a fact that might pave the way to more litigation. Third, the Paris Agreement and its rulebook only now (since 2018) are in place. The Paris Agreement puts national laws and policies into a global context and thereby enables litigants to construe governments’ commitments and actions as being adequate or inadequate. Fourth, there is already a “rising tide” of climate litigation – across different jurisdictions. This could lead to “cross-fertilisation” and legal globalisation where courts might refer to each other, across state borders and jurisdictions. Judges talk to each other and watch legal developments in other countries and jurisdictions very carefully; learning from and being inspired by legal reasoning in other cases. One example is the February 2019 case of Gloucester Resources Ltd v Minister for Planning.53 In this case, the coal mining company Gloucester Resources Ltd had sued the Minister of Planning, appealing the denial of the company’s application to construct an open cut coal mine in New South Wales (the Rocky Hill Coal Project), which proposed to produce 21 million tonnes of coal over a period of 16 years. The Land and Environment Court of New South Wales upheld the government’s denial of the application. It found that the project was not in the public interest after weighing the costs and benefits of the project, including the climate change impacts of the mine’s direct and indirect greenhouse gas emissions. In particular, Judge Preston referred to the arguments of the Urgenda case by the Hague Court of Appeal in rejecting the defence by the coal company that its emissions are minimal, that it cannot solve the problem on its own, and that the worldwide community has to cooperate. Rather, referring to The Hague case, the judge found a causal relationship between emissions and climate change. He argued that the emissions contribute to the problem and do not release the company from its obligation to take measures, within its capabilities, which in concert with the efforts of others provide protection from the hazards of dangerous climate change.54 53 Gloucester Resources Ltd v Minister for Planning, Land and Environment Court New South Wales, 8 February 2019, NSWLEC 7. 54 Judgment, Gloucester Resources Ltd v Minister for Planning, Land and Environment Court New South Wales, 8 February 2019, NSWLEC 7, 521–524.

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Fifth, the issue of climate refugees – new and not regulated in international and national law – is expected to lead to more claims and cases in national courts, as already experienced by, for example, New Zealand. Sixth, there might be more climate litigation in the Global South, with perhaps different results. Current trends suggest that litigation around climate impacts might increase in those areas where the impacts are most directly felt, in particular in vulnerable and exposed areas of the Global South. Seventh, there are many more legal issues to come, which have not been addressed in current cases – or only to a minimal extent – such as the fiduciary duties of company officers and pensions fund managers, cases seeking to ban state aid to fossil fuel (intensive) companies, and cases seeking determination of liability of a company or other entity for climate change damages. There is a key role for the judiciary and for individual judges in the battle to save the climate system from catastrophe. District Judge Ann Aiken in the Juliana case (United States) aptly captured this when she recognized: “This action is of a different order than the typical environmental case … It alleges that the defendant’s action and inactions … have so profoundly damaged the home planet that they threaten [the] plaintiffs’ fundamental constitutional rights to life and liberty.” She continued: “No doubt that the right to a climate system capable of sustaining human life is fundamental to a free and ordered society … a stable climate system is quite literally the foundation of society, without which there would be neither civilisation nor progress”.55 Many of the judgments that have recently been released give legal reasoning (as well as political inspiration) for more effective climate action. Courts cannot solve the problem alone, but they can be an important “correction” to failing action by governments and companies. 55 Order by US District Court, District of Oregon in Juliana v United States of America, Case Number: 6:15-cv-01517-TC, 14 June 2018, available at http://blogs2.law.columbia.edu.

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PART 1 FUNDAMENTAL QUESTIONS A. Liability for climate damages, sustainability and environmental justice Bibliography: Appel, Staatliche Zukunfts- und Entwicklungsvorsorge. Zum Wandel der Dogmatik des öffentlichen Rechts am Beispiel des Konzepts der nachhaltigen Entwicklung im Umweltrecht, Mohr Siebeck 2005; Aust, Das Recht der globalen Stadt. Grenzüberschreitende Dimensionen kommunaler Selbstverwaltung, Mohr Siebeck 2017; Ayers, Sustainability. An Environmental Science Perspective, CRC Press 2017; Beck, World Risk Society, Polity Press 1999; Burgi, Rechtsregime, in: Hoffmann-Riem/Schmidt-Aßmann/ Voßkuhle (eds.), Grundlagen des Verwaltungsrechts, 2nd ed., Beck 2012, § 18; Busby, Ralph Ellison, in: Western Literature Association (ed.), Updating the Literary West, Texas Christian University Press 1997, p. 520; Caney, Climate change and the duties of the advantaged, 13 Critical Review of International Social and Political Philosophy 203 (2010); von Carlowitz, Sylvicultura oeconomica. Oder haußwirthliche Nachricht und Naturmäßige Anweisung zur wilden Baum-Zucht, Braun 1713; Chatzinerantzis/Appel, Haftung für den Klimawandel, 72 Neue Juristische Wochenschrift 881 (2019); Crutzen, Geology of Mankind, 415 Nature 23 (2002); de Man, Reading (Proust), in: Allegories of Reading. Figural Language in Rousseau, Nietzsche, Rilke, and Proust, Yale University Press 1979, p. 57; Easterling, Extrastatecraft. The Power of Infrastructure Space, Verso 2014; Frank, Klimawandel – (auch) juristisch keine Blackbox, 37 Neue Zeitschrift für Verwaltungsrecht 960 (2018); Gardiner, A Perfect Moral Storm. The Ethical Tragedy of Climate Change, Oxford University Press 2011; Gosseries, Historical Emissions and Free‐ Riding, 11 Ethical perspectives, 36 (2004); Hahn, Umwelt- und zukunftsverträgliche Entscheidungsfindung des Staates, Mohr Siebeck 2017; Intergovernmental Panel on Climate Change, Climate Change 2014: Synthesis Report, IPCC 2014; Kahl, Einleitung: Nachhaltigkeit durch Organisation und Verfahren, in: Kahl (ed.), Nachhaltigkeit durch Organisation und Verfahren, Mohr Siebeck 2016, p. 1; Kahl, Nachhaltigkeitsverfassung. Reformüberlegungen, Mohr Siebeck 2018; Kemper, Politische Legitimität und politischer Raum im Wandel. Eine historisch-systematische Studie zu einem Kontextverhältnis, Springer VS 2015; Kersten, Das Anthropozän-Konzept. Kontrakt – Komposition – Konflikt, 5 Zeitschrift für rechtswissenschaftliche Forschung 378 (2014); Kloepfer, Langzeitverantwortung im Umweltstaat, in: Gethmann/ Kloepfer/Nutzinger (eds.), Langzeitverantwortung im Umweltstaat, Economica 1993, p. 22; Kloepfer, Umweltgerechtigkeit. Environmental Justice in der deutschen Rechtsordnung, Duncker & Humblot 2006; Kloepfer, Umweltrecht, 4th ed., Beck 2016; Kloepfer, Respekt im Gemeinwesen und im Recht, 110 Verwaltungsarchiv 419 (2019); Latour, Politiques de la nature. Comment faire entrer les sciences en démocratie, Éd. la Découverte 1999; Low/Gleeson, Justice, Society and Nature. An Exploration of Political Ecology, Routledge 1998; McGrath, Thinking Nature. An Essay in Negative Ecology, Edinburgh University Press 2019; Merchant, Earthcare. Women and The Environment, Routledge 1996; Meyer, Compensating Wrongless Historical Emissions of Greenhouse Gases, 11 Ethical Perspectives 20 (2004); Morton, The Ecological Thought, Harvard University Press 2010; Morton, Ecology without the Present, 34 Oxford Literary Review 229 (2012); Morton, Hyperobjects. Philosophy and Ecology after the End of the World, University of Minnesota Press 2013; Morton, Realist Magic. Objects, Ontology, Causality, Open Humanities Press 2013; Morton, Dark Ecology. For a Logic of Future Coexistence, Columbia University Press 2016; Neugärtner, “New Directions in Law and Literature” – Transatlantische Betrachtungen, 8 Zeitschrift für rechtswissenschaftliche Forschung 461 (2017); Neugärtner, Untern Fliesen liegt der Strand. Plastikmüllrichtlinienentwurf (Triptychon), 34 myops. Berichte aus der Welt des Rechts 4 (2018); Osofsky, The Intersection of Scale, Science, and Law in Massachusetts v. EPA, in: Burns/Osofsky (eds.), Adjudicating Climate Change. State, National, and International Approaches, Cambridge University Press 2009, p. 129; Ostrom, A Polycentric Approach for Coping With Climate Change, The World Bank 2009; Salzman/Thompson, Environmental Law and Policy, 4th ed., Foundation Press 2014; Singer, Animal Liberation, Avon Books 1975; Sloterdijk, Sphären III. Schäume, Suhrkamp 2004; Smale et al., Marine heatwaves threaten global biodiversity and the provision of ecosystem services, 9 Nature Climate Change 306 (2019); Spitzer/Burtscher, Liability for Climate Change: Cases, Challenges and Concepts, 8 Journal of European Tort Law 137 (2017); Steffen/Grinevald/Crutzen/McNeill, The Anthropocene: conceptual and historical perspectives, 369 Philosophical Transactions of the Royal Society 842 (2011); Thiele, Sustainability, 2nd ed., Polity Press 2016; Trexler, Mediating Climate Change. Ecocriticism, Science Studies, and The Hungry Tide, in: Gerrard (ed.), The Oxford Handbook of Ecocriticism, Oxford University

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Part 1. Fundamental questions Press 2014, p. 205; United Nations, Report of the World Commission on Environment and Development, Our Common Future, 1987; Wackernagel/Rees, Our Ecological Footprint. Reducing Human Impact on the Earth, New Society Publishers 1996; Walker, Environmental Justice. Concepts, evidence and politics, Routledge 2012; Winter, Armando Carvalho et alii versus Europäische Union: Rechtsdogmatische und staatstheoretische Probleme einer Klimaklage vor dem Europäischen Gericht, 30 Zeitschrift für Umweltrecht 259 (2019); Zenner, Laudato Si’ and Standing Rock: Water Justice and Indigenous Ecological Knowledge, in: Deane-Drummond/Artinian-Kaiser (eds.), Theology and Ecology across the Disciplines: On Care for Our Common Home, T&T Clark, 2018, p. 179.

Contents I. Introduction: global warming’s spatiotemporal strangeness – “tricky” to imagine.......................................................................................... II. Random sampling: Lliuya v. RWE – approaching liabilities for climate damages inductively......................................................................... 1. The case Lliuya v. RWE ............................................................................ 2. Three exemplary issues: statute of limitations, rivalling Rechtsregime, adequate causation ........................................................... 3. Trying to imagine “strange” ‘spaces’, ‘times’ and ‘agents’................. III. Key frameworks: ‘sustainability’, ‘environmental justice’ – and ‘ecological justice’............................................................................................ 1. Integrative frameworks for “evaluating environmental decisions” . 2. First encounters, some basic definitions, some common(?) ground a) ‘Sustainability’ – integrating future interests .................................. b) ‘Environmental justice’ – integrating the interests of people worse ‘situated’....................................................................................... 3. Some traps: ‘lucid dreams’ of harmony, ‘greenwashing’ and anthropocentrist blind spots .................................................................... 4. ‘Ecological justice’ – ‘space’, ‘time’ and ‘agency’ in the Anthropocene .............................................................................................. a) Ecophilosophical pluralism ................................................................. b) Anthropocenic culture of conflicts.................................................... IV. Times, spaces (and agents) of global warming ........................................ 1. Times of global warming .......................................................................... a) The present: protecting the status quo, myopic distributive justice, “agrilogistical” ‘presence’ ....................................................... b) The past: Neolithic and Industrial Revolution traumas, historical wrongs, reparative justice.................................................. c) The future: limited tort law doctrines, long-term responsibilities, suing public agents, post-sustainability: resilience and dynamic coping........................................................... 2. Spaces of global warming ......................................................................... a) Geographic and ecological spaces: coal basins, glaciers, the Norwegian Bourgogne – and the upper atmosphere; nonhuman agents......................................................................................... b) Economic, social, ‘cultural’ and ‘identity’ spaces: ‘skewed’ paraenvironmental justice ........................................................................... c) Political and legal spaces I: nation-states – insufficient, but still essential ................................................................................................... d) Political and legal spaces II: polycentrism, (g)local communities, federalism and supra-nationalism........................... e) Political and legal spaces III: pluralist globalism(s): UNFCCC, IPCC, “extrastatecraft”, international NGOs, conflict of laws.... V. Coda: “more time tunnels of different sizes” ...........................................

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A. Liability for climate damages, sustainability and environmental justice

“Let’s have more time tunnels of different sizes.” Timothy Morton1

I. Introduction: global warming’s spatiotemporal strangeness – “tricky” to imagine “Imagining climate change is an enormously difficult task.”2 It is impossible for (human) 1 beings to see or experience ‘global warming’ as such. Of course, humans across the globe already have to cope with the consequences of climate change such as droughts, floods and storms on a daily basis. However, although severe and possibly lethal in (masses of) single cases, these (many) individual experiences are only minute pieces of global warming as a whole. Climate change has vast expansions – viewed temporally, spatially as well as with respect to questions of ‘agency’. Greenhouse gases (GHGs) emitted by a coal-fired power plant in Europe may contribute to climate damages in glacial regions in the South American Andes (infra mns 3, 8, 43). The last centuries’ decisions to exploit fossil energy sources have created paths and dependencies which affect ‘our’ enormous contributions to global warming today and in the coming decades, if not in the coming centuries (infra mn. 35). Global warming strangely relates places around the globe, bridges time spans of centuries and involves a multiplicity of (human) actions. The literary scholar and philosopher Timothy Morton characterises global warming as a “hyperobject”: It “cannot be directly seen, but it can be thought”, however, “thinking [it] is intrinsically tricky.”3 The “tricky” and “enormously difficult task” of imagining ‘global warming’ not only 2 challenges ‘our’ cultural imagination and philosophical discourses, it also pushes ‘our’ political thinking and legal imagination4 to their limits. The present article will inquire into some of the difficulties in ‘our’, i.e., especially the European and North American, political and legal thinking about liabilities for climate damages. In doing so, it will revisit some basic frameworks for evaluating local as well as global environmental policy and law. The article focuses on the two somewhat established, though conceptually pluralistic and contested, frameworks of ‘sustainability’ and ‘environmental justice’ – supplemented by the notion of ‘ecological justice’ (infra mns 11 et seq.). Given their awareness of spatiotemporal as well as ‘agency’-related structures, these three frameworks promise some guidance for our inquiry about the times (infra mns 32 et seq.) and spaces (infra mns 43 et seq.) of global warming from the perspectives of environmental policy and law.

II. Random sampling: Lliuya v. RWE – approaching liabilities for climate damages inductively 1. The case Lliuya v. RWE In order to dive into global warming’s spatiotemporal vastness, the article is turning 3 to the case Lliuya v. RWE as an illustrative, though particularly extraordinary example for climate damages litigation. In Lliuya v. RWE, also known as the Huaraz case, the Peruvian farmer Saúl Luciano Lliuya is suing the energy utilities company RWE in German courts. Lliuya owns land near the Peruvian city Huaraz in the Andes region. 1

Morton, Dark Ecology, 2016, 113. Trexler, in: Gerrard (ed.), The Oxford Handbook of Ecocriticism, 2014, 205. 3 Morton, Hyperobjects, 2013, 3 et seq., 103. 4 Cf Kersten, Rechtswissenschaft 2014, 378 (410). 2

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Part 1. Fundamental questions

According to Lliuya, for decades, GHG emissions from RWE’s power plants have contributed to anthropogenic global warming, which, in turn, has facilitated the melting of an Andes glacier (Palcaraju) near Huaraz. The glacier’s melt waters flow into Lake Palcacocha situated above Huaraz. According to the plaintiff, given the lake’s rising water level, there is a serious threat that his land will get flooded. Therefore, Lliuya is demanding from RWE partial reimbursement of costs for protective measures directed against the potential flooding (namely “sustainable” drainage of the lake in order to reduce its water level). The demanded partial reimbursement is calculated in proportion to RWE’s share in global GHG emissions, which, according to Lliuya, amounts to 0.47 % of global total emissions from 1751 to 2010. 4 In 2015, Lliuya brought a property rights action based on German private law against RWE in the Regional Court LG Essen (civil jurisdiction). Germanwatch e. V., a nonprofit NGO (infra mns 47, 58) based in Germany, is supporting the action. The LG Essen dismissed the action in 2016, partly on justiciability grounds, partly on the merits.5 However, on appeal, the Higher Regional Court OLG Hamm preliminarily approved the justiciability and soundness of Lliuya’s action and ordered the hearing of evidence.6 At the turn of the decade, the litigation is pending.

2. Three exemplary issues: statute of limitations, rivalling Rechtsregime, adequate causation The case Lliuya v. RWE illustrates the spatiotemporal and ‘agency’-related strangeness inherent in climate ‘damages’ litigation (with ‘damages’ conceived broadly). Lliuya bases his claim on property law as codified in the German Civil Code Bürgerliches Gesetzbuch (BGB) in § 1004 Abs. 1 BGB, which is partly functionally equivalent to the doctrine of (private) nuisance (and not directed at compensation for damages in a narrow sense). The claim involves several contested legal issues. Three issues – one mainly temporal aspect, one mainly ‘agency’-related aspect and one spatiotemporal as well as agency-related aspect – shall be pointed out exemplarily: 6 First, regarding the action’s temporal dimension, Lliuya’s claim could be barred by the statute of limitations (Verjährung; cf §§ 194 et seq. BGB) since it is based on emissions that partially reach back into the past for several decades (infra mn. 36). However, on the other hand, it is possible to focus on the perpetual continuity of RWE’s power plants’ emissions (and the continuous lack of protective measures against the emissions’ harmful effects) and, thus, deny the applicability of the statute of limitations.7 More fundamentally, given global warming’s temporal vastness, some forms of climate damages litigation might face rule-oflaw concerns, for instance questions of (forbidden) retroactive effects (infra mn. 38). 7 Second, Lliuya v. RWE implicates some difficulties regarding the notion of ‘agency’ (in a broad sense), which is concerned with the capacity of autonomous entities (‘agents’) to act (infra mns 27 et seq., 30). One ‘agency’-related issue in Lliuya v. RWE involves the intricate interplay of private law and public law. Private law, e.g. torts and property law (like § 1004 Abs. 1 BGB), and public law, i.e. statutory administrative law, are separate but still somehow interdependent bodies or “regimes of law” (“Rechtsregime”8 – infra mns 40, 54). In Lliuya v. RWE, RWE’s emissions have been 5

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LG Essen, Judgement of 15.12.2016, 2 O 285, NVwZ 2017, 734. OLG Hamm, Decision of 30.11.2017, I-5 U 15/17, ZUR 2018, 118; OLG Hamm, Decision of 23.08.2018 (partly amending the former order). 7 Cf OLG Hamm, Decision of 30.11.2017, I-5 U 15/17, ZUR 2018, 118. 8 Burgi, in: Hoffmann-Riem/Schmidt-Aßmann/Voßkuhle (eds.), Grundlagen des Verwaltungsrechts, 2nd ed., 2012, § 18; Kloepfer, Umweltrecht, 4th ed., 2016, § 6, mn. 17 et seq. 6

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‘legal’ under German and European Union public law, i.e. clean air legislation and ‘climate protection’ legislation (under the German Bundes-Immissionsschutzgesetz and Treibhausgas-Emissionshandelsgesetz). One might argue that conduct which is in compliance with statutory mandates and, thus, legal under the “regime” of public law cannot be the basis for property rights liabilities under the “regime” of private law.9 (However, as the OLG Hamm has pointed out, this is not the only way in which the two “regimes of law” could be reconciled.10) Be this as it may, the tensions between public law and private law touch a more fundamental point: One might argue that public law ‘legalisation’ of RWE’s GHG emissions should be viewed as some ‘shift’ of ‘agency’ and ‘responsibility’. By ‘legalising’ the emissions, the EU and Germany as political communities could have taken final(?) responsibility for the emissions and their detrimental effects. Isn’t an effective and reliable energy supply one of the most important contributions to the German (and European) common good and public welfare?11 Might the EU and Germany as the political and socio-economical units advantaged by RWE’s operation of power plants be the relevant and primarily(?) responsible actors here? This brings up questions about the political, legal and moral ‘agency’ of political units such as nation-states and supra-national organisations (infra mns 49 et seq.), but also of socio-economical units (infra mns 45 et seq.). Remarkably, a somehow parallel shift (or supplement) of agency might be at play on the other side of the globe as well: Peru as a political and socio-economical unit might have a prior (?) responsibility to protect its citizen Lliuya – opening up questions of ‘resilience’ and adaption (infra mn. 42). Of course, these different aspects and tiers of agency and responsibility are not necessarily mutually exclusive. However, they complicate the overall picture. They point to possible other (alternative or additional) climate damages actions, particularly actions from or against political units such as Peru, Germany or the EU (infra mns 50, 55). Furthermore, they raise separation-of-powers issues, especially with regard to the relations between courts and legislation (infra § 3). Third and possibly most controversially, there is the spatiotemporal – and perhaps 8 also ‘agency’-related – issue of ‘causation’. Is it possible to establish a causal chain between RWE’s power plants’ emissions in Europe and the potential flooding of Lliuya’s land by glacial melt waters in the Andes? (The distance between Essen, North RhineWestphalia, Germany, and Huaraz, Peru, being more than 10,000 kilometres.) It has to be emphasised that, with regard to causation issues, GHG emissions and their contribution to global warming are extraordinary (‘strange’): GHGs differ from more familiar, ‘traditional’ air pollutants such as SO2, the main factor in the formation of acid rain and the notorious Waldsterben. Whereas every single SO2 molecule’s contribution to specific effects of Waldsterben – at least theoretically – can be traced spatiotemporally on its way from the point of emission to the point of the injury, GHG emissions around the globe diffuse in the upper atmosphere and form an overarching layer of “well-mixed greenhouse gases” facilitating the greenhouse effect around the globe.12 Be this as it may, from the standpoint of legal doctrine, there is the further question whether the causation issue should ‘simply’ be a question to be answered by the natural sciences, or how much room should be opened up for normative filtering and assessment operations led by legal causation doctrines such as the normative requirement of ‘adequate causation’. For instance, should it matter for approving ‘adequate causation’ 9

Cf Chatzinerantzis/Appel, NJW 2019, 881 (885). Cf OLG Hamm, Decision of 30.11.2017, I-5 U 15/17, ZUR 2018, 118, pointing to the general principle underlying norms such as § 906 Abs. 2 S. 2 BGB and § 14 S. 2 BImSchG. 11 Cf Chatzinerantzis/Appel, NJW 2019, 881 (885). 12 Cf Frank, NVwZ 2018, 960 (961), citing IPCC, Climate Change 2014: Synthesis Report, 2014. 10

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whether it was foreseeable for RWE that their emissions would lead to climate damages such as the potential damages in Huaraz? Were climate damages foreseeable before the 1970s? If ‘we’ treat foreseeability as a prerequisite of ‘(adequate) causation’, it becomes obvious that ‘causation’ doctrines are not only about ‘space’ and ‘time’, but involve (normative) ‘agency’-related considerations, too.

3. Trying to imagine “strange” ‘spaces’, ‘times’ and ‘agents’ The foregoing outline of three typical issues in climate damages litigation in the case Lliuya v. RWE was not meant to provide definitive solutions to these problems but rather to illustrate the range of “strangeness” (or “weirdness”13 or unfamiliarity or extraordinariness) involved. When we call these aspects “strange”, we – emphatically – do not intend to answer the questions raised above in the negative. For instance, we do not say that the causation requirement should be constructed narrowly and, thus, be negated in Lliuya v. RWE. The present article does not provide doctrinal legal scholarship. Rather, the article is interested in investigating possible reasons for why ‘we’ might find strangeness in climate damages litigation – and whether ‘we’ might get attuned to this strangeness. 10 The case Lliuya v. RWE has already raised some awareness of the spatiotemporal and agency-related difficulties of global warming. Before the article will turn to the temporal and spatial dimensions in detail (infra mns 31 et seq.), the key frameworks of ‘sustainability’, ‘environmental justice’ and ‘ecological justice’ are introduced (infra mns 11 et seq.) as reference points for the subsequent discussion. However, there is going to be some “necessarily iterative, circling style of thought [… in the following passages]. This is because one only sees pieces of a hyperobject [such as global warming (supra mn. 1)] at any one moment” (Timothy Morton).14 9

III. Key frameworks: ‘sustainability’, ‘environmental justice’ – and ‘ecological justice’ 1. Integrative frameworks for “evaluating environmental decisions” 11

In their textbook on (U.S.) Environmental Law and Policy, James Salzman and Barton H. Thompson list “sustainable development” and “environmental justice” as two of four “analytical frameworks” for “evaluating environmental decisions”, the others being “ethics (environmental rights)” and “utilitarianism and cost-benefit analysis”.15 These four frameworks are, of course, not mutually exclusive, but partly overlapping and interdependent. However, they put different focuses on environmental policy issues. Many approaches to “utilitarianism and cost-benefit analysis” commonly have a strong tendency towards ‘economic’, market-oriented thought. The “environmental rights” approach has its main base in (Western) philosophies of individualism (‘the self’) and ‘liberty’. (However, it should be noted that conceptions of ‘environmental rights’ are to some extent open for socio-economic and ecological extensions beyond their traditional atomistically liberalist core.16 Moreover, many conceptions of ‘utilitarianism’ go beyond crude consumerism and grant value, e.g., on endangered species because of their mere existence – ‘existence value’17 – or ‘even’ acknowledge passible 13

Cf Morton, Dark Ecology, 2016, 5 et seq. Morton, Hyperobjects, 2013, 4. 15 Salzman/Thompson, Environmental Law and Policy, 4th ed., 2014, 31 et seq. 16 Cf Salzman/Thompson, Environmental Law and Policy, 4th ed., 2014, 34 et seq. 17 Cf Salzman/Thompson, Environmental Law and Policy, 4th ed., 2014, 41. 14

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animals as morally considerable (infra mn. 26). So, these approaches might be elements in a broader, pluralist ‘ecological justice’ framework (infra mns 25 et seq.). The ‘sustainability’ and ‘environmental justice’ frameworks have an inherently inter- 12 disciplinary impetus. Both of them try to combine and integrate philosophical, ethical, ecological, economic, sociological, political and cultural thought (and imagination) in analysing environmental topics. ‘Sustainability’ and ‘environmental justice’ try to provide complex answers to the spatiotemporal and agency-related difficulties of environmental issues. However, viewed from a ‘truly’ ecological perspective, both, ‘sustainability’ and ‘environmental justice’, have contortions, limitations and exclusions.18 In both frameworks there remain black boxes, forgotten times and dispensable beings. Thus, the present article will try to present additional and corrective approaches to ‘ecological justice’ (infra mns 25 et seq.).

2. First encounters, some basic definitions, some common(?) ground a) ‘Sustainability’ – integrating future interests. These days, one of the most 13 popular, though reductive, metaphors for boiling down the notion of ‘sustainability’ is the “ecological footprint”19 metaphor. This is particularly the case in the context of global warming, where people often use the metaphor’s variation ‘carbon footprint’. (Of course, there is the fundamental symbol of ‘the circle’ as well, which might be even more popular.) The ‘ecological’ or ‘carbon footprint’ metaphor directly points to the temporal (and, maybe, even ‘paleo’-geologic20) core of sustainability: Sustainability is mainly about time, about leaving behind marks for the future. Sustainability’s temporal dimension is downright palpable in the prefix “nach-” (‘after-’) in the German word ‘Nachhaltigkeit’. Sustainability’s temporal dimension is mainly oriented towards the future. This focus on the future is as important in Hans Carl von Carlowitz’ early-modern treatise on forestry, Sylvicultura oeconomica (1713), providing guidance for the cultivation of trees to meet future demands of timbre,21 as it is for the often-cited definition in the Brundtland Report (1987): “Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”22 Carlowitz’ treatise on forestry and the Brundtland Report have one more feature in 14 common. They both have a strong pragmatic and instrumental impetus. It was Carlowitz’ aim to secure a reliable supply of timbre mainly for mining and metal processing in the pre-industrial setting in eighteenth-century Saxony.23 (Still today, sustainability, at its core, “is typically understood as the effort to use natural resources less wastefully”24, as a resources management principle.) The Brundtland Report, too, is inherently instrumental. It pairs “sustainable” with “development”. Moreover, the Brundtland Report’s “sustainable development” caters for future (as well as present) “needs”, not least “the essential needs of the world’s poor, to which overriding priority should be given”25. The notions of “development” and “needs” serve as gateways for integrating social and economic interests. 18 Cf Low/Gleeson, Justice, Society and Nature, 1998, 103, 131 et seq., 133, 162 et seq.; Gardiner, A Perfect Moral Storm, 2011, 43; Kersten, Rechtswissenschaft 2014, 378 (390, 401). 19 Wackernagel/Rees, Our Ecological Footprint, 1996. 20 Cf Steffen/Grinevald/Crutzen/McNeill, 369 Philosophical Transactions of the Royal Society 2011, 842 (842): “human imprint on the global environment” as “a new epoch in Earth history”: the “Anthropocene” (infra mn. 28). 21 von Carlowitz, Sylvicultura oeconomica, 1713. 22 United Nations, Our Common Future, 1987, part I, ch. 2. 23 Cf Thiele, Sustainability, 2nd ed., 2016, 16 et seq. 24 Thiele, Sustainability, 2nd ed., 2016, 3. 25 United Nations, Our Common Future, 1987, part I, ch. 2.

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Taken together, Carlowitz’ and the Brundtland Report’s approaches to ‘sustainability’ reveal the framework’s ambitious integrative, apparently nearly holistic task: Sustainability is based on the “three pillars of society, ecology, and economy”26 and engages in “balancing of economic prosperity, social fairness, and environmental responsibility”27. In course of this endeavour, sustainability is purposely focusing on the future. This longing for the future is the source for sustainability’s popularity and for its success as a massively received framework around the world today. Thinking in terms of ‘sustainable development’ comes along as optimistic thinking. It can commonly be framed in the positive language of achieving objectives instead of the language of negative avoidance. ‘Sustainable development’ is about combining (‘self’‐)preservation, i.e., continuity, with progress and success; at the same time, it is about being morally and socially aware. This is, of course, a highly attractive mode of thinking, especially in an era of self-optimisation – however, there is some potential of naivety, self-deceit and abuse in this (over-)integrative approach (infra mns 22 et seq.).

b) ‘Environmental justice’ – integrating the interests of people worse ‘situated’. It is hard to find a significant metaphor for ‘environmental justice’, which could serve as a functional equivalent to the popular metaphors and symbols for ‘sustainability’ (the ‘footprint’, etc. – supra mn. 13). We suppose this is because of the quite prosaic impetus of ‘environmental justice’: At its core, the ‘environmental justice’ framework is about awareness of ‘real-world’ (human) beings suffering from environmental problems at certain ‘real-world’ places. So, instead of metaphors, quite tangible situations that stand representatively for ‘environmental justice’ come to mind (as “casual encounter[s]” or deconstructive ‘metonymies’28, as it were). For instance, one might think of a toxic waste landfill sited next to a rather poor local community inhabited by minority groups as a metonymy for ‘environmental injustice’.29 Indeed, the idea (and movement) of ‘environmental justice’ as born in the United States of America during the last quarter of the twentieth century is, at its heart, defined spatially, socio-economically – and with regard to civil rights.30 Basically, it is a socio-economic ‘geopolitics’ approach to environmental policy decisions, partially accompanied and catalysed by civil-rights aspects (infra mn. 19). 17 Environmental justice emphasises the fact that environmental burdens tend to be distributed disproportionately among localities, excessively disadvantaging poor and minority neighbourhoods. This is directly comprehensible with regard to the spatial dispersion of pollution (toxic waste, many air pollutants, noise, etc.). The spatial dispersion of pollution can be affected by siting decisions on where to locate pollution sources (dumps, power plants, traffic, etc.). Hence, environmental justice often turns on resistance to very specific locally unwanted land uses (LULU) and, sometimes, on ‘not in my backyard’ (NIMBY) mentalities.31 Further, a complex environmental justice approach has to integrate awareness of economic long-distance effects and shifting mechanisms. For instance, spatial pollution inequalities often do not simply result from 16

Thiele, Sustainability, 2nd ed., 2016, 5. Ayers, Sustainability, 2017, 2. 28 Cf de Man, in: Allegories of Reading, 1979, 57 (62 et seq.) (contrasting ‘metonymy’, which is based on “the casual encounter of two entities,” and ‘metaphor’, which is based on a “relational link between […] the two entities involved [… which] becomes so strong that it can be called necessary”). 29 Cf Salzman/Thompson, Environmental Law and Policy, 4th ed., 2014, 43 (describing the demonstrations against a toxic waste landfill in Warren County, North Carolina, U.S.A., a poor municipality with a predominantly ‘non-white’ population, in the 1980s); cf Walker, Environmental Justice, 2012, 78 et seq. 30 Cf Salzman/Thompson, Environmental Law and Policy, 4th ed., 2014, 43 et seq.; Kloepfer, Umweltgerechtigkeit, 2006, 20 et seq., 55, 59 et seq. 31 Cf Low/Gleeson, Justice, Society and Nature, 1998, 112 et seq. 26 27

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siting decisions as such, but also from complex housing market reactions to environmental policy decisions: Poorer people often are simply not able to move away from intensely polluted neighbourhoods because they are not able to pay higher rents for housing in less polluted areas.32 However, not only pollution, but also (the costs of) environmental protection and adaption measures potentially burden certain social groups in an unduly manner.33 Thus, a broad approach to environmental justice might also take into account how the costs for environmental protection and adaption measures are distributed among social groups. For instance, rising prices for housing, electricity, transport, food and consumer goods, affected by environmental policy measures, become a relevant issue in a broadly construed environmental justice framework. The civil-rights aspect of environmental justice is concerned with the environmental policy implications of (constitutional and statutory) rights of individuals, especially individuals from minority groups. This includes rights-based anti-discrimination efforts, mainly against ‘environmental racism’.34 Particularly, however not exclusively, in the United States35, the spatial and socio-economic dimension of environmental justice often implies environmental racism. Socio-economically poor neighbourhoods unduly burdened by pollution often have a large percentage of inhabitants from ‘minority’ groups (defined as ‘minorities’ nationwide or statewide, not locally). Environmental justice brings to the fore health and welfare interests (and rights) of people who are – literally and figuratively – ‘situated’ worse than the average citizen. The word ‘situated’ (as well as the German word ‘situiert’) captures the interplay of the spatial and the socio-economic dimension of environmental injustice. Moreover, the passive voice in the phrase ‘being situated’ points to a fundamental problem addressed by environmental justice: Environmental justice is about overcoming passivity. Minority groups’ typical passivity with respect to environmental policy issues is often involuntary. It has many reasons and faces such as economic confines (e.g., housing immobility, supra mn. 17), educational disadvantages (lack of information and awareness about environmental and health issues) and political inaction (low voting rates36). In the face of this multidimensional passivity commonly involved in environmental injustice, unsurprisingly, environmental justice comes along with an often overtly activist impetus as “a campaigning slogan, […] as an agenda, as a name given to a political movement.”37 The issues of ‘passivity’ and ‘activism’ will be taken up below in our discussion of global warming ‘agencies’ (infra mns 47, 58, 60). Environmental justice can be described as having a substantive core and a procedural jacket.38 The substantive core is essentially about distributive justice, about justly distributing environmental quality among human beings (infra mn. 35).39 However, given the economic, social and ecological complexities of environmental policy concerns, distributive environmental justice may be hard to define. Thus, procedural aspects of environmental justice might take over, e.g., integrating minority groups’ Cf Salzman/Thompson, Environmental Law and Policy, 4th ed., 2014, 44 et seq. Cf Kloepfer, Umweltgerechtigkeit, 2006, 21. 34 Cf Salzman/Thompson, Environmental Law and Policy, 4th ed., 2014, 44 et seq.; cf Walker, Environmental Justice, 2012, 20. 35 Cf Kloepfer, Umweltgerechtigkeit, 2006, 5. 36 Cf Salzman/Thompson, Environmental Law and Policy, 4th ed., 2014, 45. 37 Walker, Environmental Justice, 2012, 1, 21. 38 Cf Walker, Environmental Justice, 2012, 21; Salzman/Thompson, Environmental Law and Policy, 4th ed., 2014, 43 et seq. 39 Cf Low/Gleeson, Justice, Society and Nature, 1998, 24, 102 et seq. 32 33

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environmental interests in democratic and participatory procedures (infra mn. 51).40 The activist impetus at the heart of environmental justice (supra mn. 20) is reflected in this procedural prong.

3. Some traps: ‘lucid dreams’ of harmony, ‘greenwashing’ and anthropocentrist blind spots Sustainability and environmental justice each are inherently integrative (supra mns 15, 17) and highly prolific frameworks. Based on its three-pillar structure (supra mn. 15), sustainability proves especially absorptive. Remarkably, sometimes ‘environmental justice’ is treated as an integral part of ‘sustainability’41 – and vice versa42. Some trap of ‘over-integration’ is lurking in these broad approaches towards ‘sustainability’ and ‘environmental justice’. This ‘over-integration’ aspect threatens to weaken particularly the position of ecological aspects within the broader frameworks of ‘sustainability’ and ‘environmental justice’ simply because of the overwhelming overload of total framework elements that have to be put together and parameters that have to be adjusted. Besides this mainly quantitative overload aspect, by ‘over-integration’ we also mean the possibility that economic, social and ecological aspects ultimately become blurred and get swallowed up in some lucid dream of harmonic43 “sustainable development” (supra mn. 14), seemingly benefitting all and hurting nobody. 23 Closely related to this ‘over-integration’ trap, there is the problem of ‘greenwashing’. The sustainability framework is extremely popular today (supra mn. 15). However, it has become vulnerable to abuse by “[v]ague, hypocritical, or unsupported endorsements”44. ‘Sustainability’ often comes along as a mere marketing label in business and politics without substantially improving the consideration of ecological and social demands in the evaluation of projects and actions.45 Arguably, the environmental justice framework is less inclined to ‘greenwashing’. Given its ‘realist’, prosaic attitude (supra mn. 16) and often openly activist impetus (supra mns 20 et seq.), it can potentially serve as a metonymic deconstruction of the harmonic lucid dream of “sustainable development” (supra mns 16, 22). 24 Nevertheless, both, sustainability and environmental justice, can be used as highly prolific frameworks. Applied sincerely, they can offer solutions to environmental policy questions that pay attention to the wide range of interests typically involved. Nevertheless, sustainability and environmental justice have their limitations. First and foremost, both have “maintained a focus on questions of justice to people in the environment […], rather than expressing a politicised concern for justice to nature”.46 The two frameworks traditionally come along with a strong anthropocentric and instrumental emphasis. By and large, they are ignorant of and blind to non-human interests.47 22

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Walker, Environmental Justice, 2012, 21. Cf Thiele, Sustainability, 2nd ed., 2016, 39 et seq. (analysing “the geography of sustainability” with the sub-section “social inequality and environmental justice”, ibid., 52 et seq.); cf the critically descriptive approach in Walker, Environmental Justice, 2012, 1, 28 (describing “sustainable development” as the “master frame”, which incorporated “environmental justice ideas”, in the late 1990s in the UK). 42 Cf Salzman/Thompson, Environmental Law and Policy, 4th ed., 2014, 32. 43 Cf Kersten, Rechtswissenschaft 2014, 378 (406). 44 Thiele, Sustainability, 2nd ed., 2016, 6; cf Kahl, in: Kahl (ed.), Nachhaltigkeit durch Organisation und Verfahren, 2016, 1 (1 et seq.); Kahl, Nachhaltigkeitsverfassung, 2018, 1. 45 Cf Thiele, Sustainability, 2nd ed., 2016, 6 et seq. 46 Walker, Environmental Justice, 2012, 20 (describing ‘environmental justice’ in the U.S.A.; internal citations and italicisation omitted). 47 Cf Low/Gleeson, Justice, Society and Nature, 1998, 162 et seq. (on sustainability and “market environmentalism”), 103, 131 et seq., 133 (on environmental justice); cf Gardiner, A Perfect Moral Storm, 2011, 43. 41

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4. ‘Ecological justice’ – ‘space’, ‘time’ and ‘agency’ in the Anthropocene a) Ecophilosophical pluralism. For quite some time now, scholars as well as activists 25 have formulated philosophical and “politicised concern[s] for justice to nature”48 and to non-human beings. These scholars have emphasised the anthropocentric and instrumental limitations of both, sustainability and environmental justice, in addressing ecological issues (supra mn. 24). For instance, ‘as early as’ in 1998, Nicholas Low and Brendan Gleeson bundled up a pluralist conception of “ecological justice” as an additional framework for assessing environmental policy issues, expressly supplementing49 – not replacing – the frameworks of ‘sustainability’ and ‘environmental justice’.50 In framing their pluralist “ecological justice” framework, Low and Gleeson build on 26 older “ecophilosophical” approaches proposed from the 1970s onwards, which, in turn, are based on seminal thinkers like Spinoza, Bentham or Marx. These “ecophilosophical” approaches try to open up ‘justice’ to non-human beings in quite different ways. Low and Gleeson present three different routes for this endeavour: First, one could ‘simply’ expand the scope of moral considerability to include non-human beings, e.g., based on Peter Singer’s utilitarian criterion of whether a being can suffer pain.51 Second, ecosocialists and ecofeminists have pointed to social systems as systems of domination, which not only structure social relations among human beings but also relations between human and non-human beings.52 As a consequence, the ecofeminist Carolyn Merchant calls for a partnership ethic of “earthcare”, acknowledging notions of community, diversity, inclusion, care and respect53 among human as well as non-human agents.54 Third, Low and Gleeson point to ‘Deep Ecology’, championed by Arne Naess: Largely building on Spinoza and “eastern mysticism”, Deep Ecology proposes an environmental holism, extending ‘the self’ beyond the individual human to encompass the individual’s biotic community and the non-living foundations of this community.55 According to Low and Gleeson, these different approaches to ecological justice some- 27 how – quite abstractly – share in common “an ecologically enlarged conception of the self” in the light of a new understanding of both ‘society’ and ‘nature’.56 (True, there are also more radical ecophilosophical approaches, particularly object-oriented ontology – OOO – standpoints that question the validity of holistic-anthropocentric notions such as ‘nature’, ‘world’ or ‘space’ more fundamentally: “In a reality without a home, without world, […] objects are what constitute reality. […] The time of hyperobjects is the time during which we discover ourselves on the inside of some big objects (bigger than us, that is): Earth, global warming, evolution.”57) When Low and Gleeson call for an “enlarged conception of the self” as the foundation for ecological justice, they bring to the fore problems surrounding the notion of ‘agency’, i.e., the capacity of an ‘autonomous’ entity 48

Walker, Environmental Justice, 2012, 20. Cf Low/Gleeson, Justice, Society and Nature, 1998, 26. 50 Low/Gleeson, Justice, Society and Nature, 1998, 133 et seq. 51 Cf Low/Gleeson, Justice, Society and Nature, 1998, 138, with reference to, i.a., Singer, Animal Liberation, 1975. 52 Cf Low/Gleeson, Justice, Society and Nature, 1998, 143, 145. 53 Cf Kloepfer, VerwArch 2019, 419 (432 et seq.). 54 Merchant, Earthcare, 1996, 217; cf Low/Gleeson, Justice, Society and Nature, 1998, 148. 55 Cf Low/Gleeson, Justice, Society and Nature, 1998, 150 et seq.; for a critique of “Deep Ecology” as potentially fascist or apocalyptic cf McGrath, Thinking Nature, 2019, 33 et seq.; cf also Merchant, Earthcare, 1996, 216. 56 Low/Gleeson, Justice, Society and Nature, 1998, 134. 57 Morton, Hyperobjects, 2013, 116, 117 et seq.; for a critique of Morton’s OOO-based “Dark Ecology” cf McGrath, Thinking Nature, 2019, 73 et seq. 49

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to act. Particularly, they turn to the question of ‘moral agency’.58 For Low and Gleeson, writing in 1998, “ecological justice” is precisely about “reconsidering the interpretation of human autonomy in the light of ecophilosophy.”59 b) Anthropocenic culture of conflicts. At the turn to the third millennium, Paul Crutzen coined – or at least popularised – the term “Anthropocene” (with express reference to Antonio Stoppani’s description of an “anthropozoic era” in 1873): The Anthropocene is “the present, in many ways human-dominated, geological epoch,” having “started in the latter part of the eighteenth century […,] supplementing the Holocene.”60 During the Anthropocene, “humankind has become a global geological force in its own right.”61 Crutzen and other scholars have divided the Anthropocene into three stages – the industrialisation (stage 1), “the Great Acceleration” after 1945 (stage 2) and an on-going third stage, in which humankind is developing “growing awareness of human impact on the environment at the global scale and the first attempts to build global governance systems to manage humanity’s relationship with the Earth system.”62 In the reflective stage of the Anthropocene, humankind – facing the facts of anthropogenic global warming, man-made diminution of biodiversity and millennia-lasting high-risk nuclear waste – is increasingly articulating and negotiating changes in ‘our’ understanding of ‘time’ and ‘space’ and ‘agency’ and ‘knowledge.’63 This closely matches Low and Gleeson’s discussion of ecological justice, particularly their call to “reconside[r] the interpretation of human autonomy in the light of ecophilosophy”64 (supra mn. 27). 29 Quite in this vein, Jens Kersten has addressed the issue of (human) autonomy and agency in the reflective Anthropocene and drawn conclusions for (‘our’) political and legal governance. Building on the central notion of ‘conflict’ and referring to Peter Sloterdijk’s “Homo Sapiens luxus”, Kersten calls on humankind to engage as “emotionally and cognitively rich beings getting attuned to all the complexities of the Anthropocene, individually and institutionally.”65 According to Kersten, this requires that human beings acknowledge the far-reaching consequences of their actions including the manifold interdependencies and conflicts with other – human and non-human – beings. The Homo Sapiens luxus refrains from illicitly reducing the complexities of the Anthropocenic ‘world’ and addresses other being’s interests and resulting conflicts(!) in an open-minded as well as open-hearted fashion (infra mn. 58).66 30 It has to be emphasised that thinking in terms of Anthropocenic ecological justice should not be reduced to relationships of human beings to non-human beings. Rather, it re-defines ‘plain’ ‘justice’ among human beings as well.67 The spheres of the human and the non-human cannot be separated sterilely; “the human is always already occupied by nonhumans.”68 Viewed from the perspective of an Anthropocenic “culture of conflicts” as proposed by Kersten (supra mn. 29), some of ‘our’ legal conflicts and 28

58

Low/Gleeson, Justice, Society and Nature, 1998, 138, 148. Cf Low/Gleeson, Justice, Society and Nature, 1998, 24. 60 Crutzen, 415 Nature 23 (2002). 61 Steffen/Grinevald/Crutzen/McNeill, 369 Philosophical Transactions of the Royal Society 2011, 842 (843). 62 Steffen/Grinevald/Crutzen/McNeill, 369 Philosophical Transactions of the Royal Society 2011, 842 (856); cf Kersten, Rechtswissenschaft 2014, 378 (380). 63 Cf Kersten, Rechtswissenschaft 2014, 378 (378, 381). 64 Cf Low/Gleeson, Justice, Society and Nature, 1998, 24. 65 Kersten, Rechtswissenschaft 2014, 378 (413 et seq.), translation by M.K./R.D.N., with reference to Sloterdijk, Sphären III, Suhrkamp 2004, 699 et seq. 66 Cf Kersten, Rechtswissenschaft 2014, 378 (405 et seq., 413 et seq.). 67 Cf Low/Gleeson, Justice, Society and Nature, 1998, 103. 68 Morton, Oxford Literary Review 2012, 229 (231). 59

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legal doctrines appear in a new light. To give an example, we return to the case Lliuya v. RWE – a conflict between two human or at least humanly controlled agents. As mentioned above, the case involves intricate causation issues, particularly with regard to the ‘strange’ manner in which GHGs contribute to the greenhouse effect by forming a layer of “well mixed greenhouse gas” around the globe (supra mn. 8). Lliuya v. RWE is “already occupied by” the ‘strange’ non-human agent “well mixed greenhouse gas”. It is ‘strange’ (uncanny69 and possibly terrifying) to imagine an active and highly powerful object – some ecophilosophers would say: non-human being – called “well mixed greenhouse gas”, however, in the reflective Anthropocene, it is inevitable.

IV. Times, spaces (and agents) of global warming Taken together, the frameworks of ‘sustainability’ with its focus on ‘time’ (supra 31 mn. 13), ‘environmental justice’ with its focus on ‘space’ (supra mn. 16) and ‘Anthropocenic ecological justice’ with its special awareness of ‘strange’ ‘agents’ (such as “well mixed greenhouse gas” – supra mn. 30) allow ‘us’ to better acknowledge the spatiotemporal and agency-related strangeness of, i.a., global warming. By putting these frameworks next to each other, ‘we’ may get in the position to look for times, spaces and agents ignored by the traditional frameworks, allowing for post-sustainability (infra mn. 42) and para-environmental justice (infra mn. 48), as it were. It is time to turn to global warming in detail, to its many agents in various times (infra mns 32 et seq.) and various spaces (infra mns 43 et seq.). Put in the words of Timothy Morton: Global warming smears70; it is “not [simply] ‘in’ time and space. Rather, [it] ‘time[s]’ (a verb) and ‘space[s].’ [It] produce[s] time and space”71:

1. Times of global warming The Anthropocene (supra mn. 28) is, at the one hand, ‘our’ ‘paleo’-geologic present, 32 however, on the other hand, it is the era of transience – and, more importantly, of human reflection on transience.72 To conceive of conflicts surrounding global warming in an Anthropocenic aware manner (supra mn. 29) requires attention for global warming’s manifold temporal aspects, bridging present, past and future. a) The present: protecting the status quo, myopic distributive justice, “agrilogis- 33 tical” ‘presence’. Like most statutes and regulations, § 1004 Abs. 1 S. 1 BGB, the legal basis for the nuisance-akin claim in Lliuya v. RWE (supra mn. 5), is written in present tense: “If the property is interfered with […], the property owner may require the interferer to remove the interference.” What we encounter here could be called ‘legal present’. ‘Legal present’ is a complex structure: Of course, the statutory language, though grammatically set in the present tense, is applied to events that lie – at least in part – in the past. For Lliuya v. RWE, we have already pointed to the fact that the plaintiff is referring to a timespan reaching quite deep into the past (several decades of continuous GHG emissions – supra mns 3, 6). However, still, the claim is anchored in the present since the plaintiff is addressing the current threat posed by the rising water level of Lake Palcacocha to his property. A ‘threat’, to be sure, necessarily is an anticipation of possible future events, a prediction looking beyond ‘now’. However, 69

Cf Morton, Oxford Literary Review 2012, 229 (232). Cf Morton, Dark Ecology, 2016, 7. 71 Morton, Realist Magic, 2013, 176; cf Morton, The Ecological Thought, 2010, 2. 72 Cf Kersten, Rechtswissenschaft 2014, 378 (380 et seq.). 70

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this anticipation is fairly bound to the present situation, stressing the status quo as worthy of protection from impairments. (Of course, there are also more future-oriented forms of global warming litigation, lawsuits that demand more fundamental – i.e., ‘political’ – changes, including amendments of the law – infra mns 40, 50, 54 et seq.) 34 A strong fixation on the status quo can be found not only in large parts of traditional legal doctrine, but also in many approaches to environmental policy evaluations. Typically, the ‘environmental justice’ framework has a clear focus on the present. Regularly, it discusses questions of the spatial and social allocation of environmental quality and burdens (supra mns 16 et seq.) at a given moment in time. True, as outlined above, some approaches to ‘environmental justice’ try to integrate future interests (supra mn. 22) and, more fundamentally, there is some moment of change, emancipation, progress and ‘future’ inherent in the activist impetus typical for environmental justice (supra mn. 20). However, still, environmental justice is commonly fixated on environmental, health and welfare protection issues that come along as (mere) re-actions to quite specific measures threatening the environment, health or welfare such as certain siting decisions with regard to LULUs (supra mn. 17). 35 Nicholas Low and Brendan Gleeson have criticised traditional approaches to ‘environmental justice’ and ‘sustainability’ (supra mn. 25) because of their fixation on the status quo: These approaches tend to get “trapped in the politics of distributional justice” when they focus on “the spatial allocation of risk” instead of addressing the “production of risk”73 – and one might add: the production of conflicts (supra mns 29 et seq.). Low and Gleeson characterise ‘distributional justice’, which is at the heart of the ‘environmental justice’ framework (supra mn. 21), as myopic and superficial. They call for a more fundamental questioning of ‘our’ economic modes of production, distribution and consumption. To be sure, in the face of path dependencies, inertia and insistence on acquired positions (Besitzstände), this agenda is bothersome for many and politically controversial. Timothy Morton has tried to explain the fixation on ‘presence’ in ‘our’ prevailing environmental policy with what he calls “agrilogistics”, i.e., humankind’s relentlessly droning “machinery” of agricultural production well underway since the onset of human settling and husbandry about 12,000 years ago.74 For Morton, agrilogistics is deeply linked to “the metaphysics of presence”, or – put more bluntly – to “know[ing] where the next meal is coming from”.75 Agrilogistics is epitomised by the (agricultural) field, which, as a field, “remains constantly the same”, no matter whether you “plough it, sow it with this or that or nothing, [or] farm cattle” on it.76 36

b) The past: Neolithic and Industrial Revolution traumas, historical wrongs, reparative justice. For Morton, the establishment of the “agrilogistic” mode of production and consumption (supra mn. 35) during the Neolithic Revolution is the nucleus of anthropogenic global warming; the Industrial Revolution is its ‘logical’ continuation, aggravation and acceleration.77 In the course of the Industrial Revolution, human beings have started to deposit a thin layer of carbon in the Earth’s crust and, thus, have become a geological force, opening up the Anthropocene (supra mn. 28).78 This layer of carbon can now be detected in Arctic ice and deep lakes – forming a “geotrauma, a palimpsest of necessarily violent inscription events”.79 Of course, there is not only a carbon layer in 73

Low/Gleeson, Justice, Society and Nature, 1998, 131. Cf Morton, Dark Ecology, 2016, 38 et seq. 75 Morton, Dark Ecology, 2016, 48, 52. 76 Morton, Dark Ecology, 2016, 48. 77 Cf Morton, Dark Ecology, 2016, 42 et seq. 78 Cf Morton, Oxford Literary Review 2012, 229 (231 et seq., 234). 79 Morton, Oxford Literary Review 2012, 229 (231, 234). 74

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the Earth’s crust, but, moreover, a growing layer of “well-mixed greenhouse gases” in the Earth’s atmosphere (supra mn. 8), which is constantly and increasingly facilitating global warming. It has to be emphasised that this man-made layer of “well-mixed greenhouse gases” has an inherently ‘historical’ dimension since CO2 molecules regularly last in the Earth’s atmosphere for more than 100 years.80 Besides these geological and physical aspects, the “traumas” dating back to the 37 Neolithic and Industrial Revolutions have a socioeconomic and political dimension, too. The intense social upheavals linked to the Industrial Revolution are commonplace (Soziale Frage). However, Morton points to deeper roots and stresses the socioeconomic implications of the “agrilogistic” mode of production: According to Morton, right from the onset of human agricultural activity, there were miserable social conditions for many, patriarchy, social stratification and speciesism.81 Given this intertwining of the history of agriculture and industrialisation with the emergence and perpetuation of social and political inequalities, a deep environmental justice framework should have a historical dimension. Deep ‘environmental justice’ possibly has to be extended beyond its distributional justice core (supra mns 21, 34 et seq.) and involve questions of reparative justice as well. A historically aware environmental (or ecological) justice approach might have to negotiate calls for reparation, for reconciliation – and for future emancipation. Reparative environmental (or ecological) justice should be informed by positions and interests shaped by histories of social and political repressions, e.g., by ecological knowledge hold by people with disabilities, ecofeminist knowledge82, Indigenous traditional ecological knowledge (ITEK)83 and post-colonial ecological knowledge. Exemplarily, some ecofeminists claim that ‘we’ should move from ‘sustainable development’ (supra mn. 14) towards “sustainable livelihood”, an ambitious “peopleoriented approach that emphasizes the fulfillment of basic needs—health, employment, and old-age security, the elimination of poverty, and women’s control over their own bodies, methods of contraception, and resources.”84 A particularly important historical aspect of anthropogenic global warming con- 38 cerns the relationship between ‘developed’ and ‘developing’ (‘less economically developed’) countries, which is largely a question of (post‐)colonialism. ‘Developed’ countries have been contributing to the increase of “well-mixed greenhouse gases” around the globe for a much longer time, at the same time exploiting ‘developing’ countries’ resources (infra mn. 45). Should the differences between ‘developed’ and ‘developing’ countries in their respective (historical) shares in contributions to anthropogenic global warming count today when ‘we’ devise environmental policy? The basic ‘polluter pays’ principle (infra Part 1, B.) seemingly provides an easy solution: Polluters who have contributed to global warming to a larger extent in the past should pay proportionately more when it comes to the costs of climate damages, protection or mitigation. However, who exactly is (or was) “the polluter”? If one defines specific historical agents, i.e., certain nineteenth- or twentieth-century polluters, as “the polluter”, one could argue that it is problematic to confer climate change responsibility on these agents’ ‘descendants’. (At this point, we leave aside the additional problem of the relationship between responsibility and ignorance, the question whether it is possible to ascribe responsibility to agents who did not know about the consequences of their 80

Cf Frank, NVwZ 2018, 960 (961). Cf Morton, Dark Ecology, 2016, 44. 82 Cf, e.g., Merchant, Earthcare, 1996, 216 et seq. 83 Cf, e.g., Zenner, in: Deane-Drummond/Artinian-Kaiser (eds.) Theology and Ecology across the Disciplines, 2018, 179 (181). 84 Merchant, Earthcare, 1996, 222 et seq. 81

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actions.85) By what kind of criteria should such a ‘heritage’ of global warming responsibility built up by past agents be ascribed to agents in the present? One could think of political criteria (e.g., collective responsibility of nation-states or other political entities for ‘their’ past), legal criteria (legal rules of succession), or socio-economic criteria (compensation for socio-economic benefits ‘inherited’ from the past by ‘free-riding’ – i.e., shifting to the ‘beneficiary pays principle’86). Presumably, a large deal of these questions rather belongs to the ‘realm of politics’ (infra mn. 40) and international negotiations and not so much to the ‘realm of the law’ (yet). c) The future: limited tort law doctrines, long-term responsibilities, suing public agents, post-sustainability: resilience and dynamic coping. (How) can ‘the law’ respond to Low and Gleeson’s call for a more radical reconsideration and correction of ‘our’ “production of risks” and conflicts instead of merely distributing risks (supra mn. 35)? The answers to this question necessarily differ according to the particular legal system one is talking about. However, as a general matter, it might be useful to differentiate between private law claims, especially tort law claims, on the one hand, and public law claims on the other hand.87 As far as private law claims are concerned, commentators often stress the limitations of established doctrines, which allegedly resist easy application to global warming cases.88 For instance, in a comparative overview, Martin Spitzer and Bernhard Burtscher have identified three main elements of tort law claims under many jurisdictions: harm, misconduct and causation.89 According to Spitzer and Burtscher, particularly misconduct and causation are regularly difficult to prove in climate damages litigation.90 Especially the element of (culpable) ‘misconduct’ exemplifies tort law’s regular bias for the perpetuation of the status quo in ‘our’ “production of risk”. Many forms of risk production are simply not regarded as (culpable) ‘misconduct’ and, thus, do not carry the consequence of tort liability even if they cause global warming damages. However, there might be at least two alternative doctrinal routes that possibly go without the requirement of culpable misconduct: strict liability and injunctive relief doctrines91 (or, even less ‘intrusive’ for the emitting agent, claims to protective measures at the site of the potential harm as urged in Lliuya v. RWE – supra mn. 3). 40 Be that as it may, it seems, by and large, one has to turn from the sphere of (tort) law to the ‘realm of politics’ in order to engage in a fundamental reconsideration of ‘our’ “production of risks” and in a re-framing of conflicts, which would be directed to more profound changes in the future. Ecologic long-term responsibilities and the interests of future generations have to be addressed politically. However, this political endeavour is, to some extent, structured and framed by (constitutional and administrative) law. At this point, another type of climate change litigation, namely lawsuits against governments, against public authorities, and possibly even against legislative bodies, thus, a different “Rechtsregime” (supra mn. 7), might come into play. The U.S. Supreme Court’s decision in Massachusetts v. Environmental Protection Agency92 and the Dutch Urgenda 39

85 Cf Meyer, Ethical Perspectives 2004, 20 (adding that “people can be said to be harmed by wrongless harm-doing of previous generations”). 86 Cf Gosseries, Ethical Perspectives 2004, 36; others prefer the “Ability to Pay Principle”, cf Caney, CRISPP 2010, 203. 87 Cf Spitzer/Burtscher, JETL 2007, 137 (149). 88 Cf Spitzer/Burtscher, JETL 2007, 137 (162, 165 et seq., 175 et seq.); Chatzinerantzis/Appel, NJW 2019, 881. 89 Spitzer/Burtscher, JETL 2007, 137 (155 et seq.). 90 Spitzer/Burtscher, JETL 2007, 137 (162, 165 et seq.). 91 Cf Spitzer/Burtscher, JETL 2007, 137 (165 et seq., 174 et seq.). 92 549 U.S. 497 (2007).

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case93 can count as flagship litigations for this form of climate change litigation. In a nutshell, these litigations aim at compelling public political (or administrative) agents to intensify measures to be taken against global warming. Since they depend on the existence of a political community, these cases will be sketched out in our discussion of the political spaces of global warming (infra mns 50, 54 et seq.). More than the average private law claim, which usually shall preserve some status quo, 41 global warming related litigation directed against public political agents regularly aims at political changes in the future. In this respect, this kind of public law litigation seems to match the explicitly future-oriented framework of ‘sustainability’ (supra mn. 13) quite neatly. However, as some commentators have pointed out, the sustainability framework, mainly because of its rather conservative and highly integrative, even harmonising character (supra mns 15 and 22), might not be able to provide sufficient guidance for political changes necessary to address global warming’s causes and consequences.94 Sustainability, for its critics, a “common name for managing and regulating flows”95, does not question the necessity of these flows in the first place. Similar reservations have been brought forward against the precautionary principle as well as against notions such as Ulrich Beck’s “(world) risk society”96. According to Jens Kersten, in the Anthropocene, it might simply not be enough to address ecological problems in terms of “risks” that have to be kept down, canalised and managed.97 Thinking in terms of “risks” bears the risk to trivialise or block out substantial dangers as mere ‘residual risks’ or, conversely, to overstate worst-case scenarios.98 Moreover, the precautionary principle and risk management fail to provide substantive criteria for the definition, attribution and assessment of “risks”.99 Instead, according to Kersten, an Anthropocenic environmental (and ecological) 42 justice approach – as a form of post-sustainability100, as it were – should pay attention to the ecologically informed “culture of conflicts” (supra mns 29 et seq.). With regard to the temporal dimension of global warming, the notion of (ecological) ‘resilience’ might provide useful guidance. Kersten stresses the dynamic character of resilience. Awareness of resilience means a permanent negotiation between resistance and adaption, resulting in a dynamic process of experimentation and coping.101 To be sure, resilient dynamic coping must not be confused with simplistic, apologetic, consoling adulations of desired, but uncertain technological progress at the cost of necessary changes in the modes of production and consumption.

2. Spaces of global warming a) Geographic and ecological spaces: coal basins, glaciers, the Norwegian Bour- 43 gogne – and the upper atmosphere; non-human agents. “Geography is fate” – this axiom, sometimes ascribed to Heraclitus102, casts an obscure light on the deeper ‘meaning’ of ‘geography’. Indeed, the spatial allocation of global warming’s causes and consequences seems to be “fate”. Just recall Lliuya v. RWE (supra mn. 3): Somehow it might be “fate” that the defendant, RWE, is based in Essen, North Rhine-Westphalia, 93

Rechtbank Den Haag, Judgment of 24 June 2015, C/09/456689, HA ZA 13-1396. Cf Kersten, Rechtswissenschaft 2014, 378 (390, 406); Morton, Realist Magic, 2013, 113. 95 Morton, Realist Magic, 2013, 111. 96 Beck, World Risk Society, 1999, 19 et seq. 97 Cf Kersten, Rechtswissenschaft 2014, 378 (401 et seq.). 98 Cf Kersten, Rechtswissenschaft 2014, 378 (402). 99 Cf Kersten, Rechtswissenschaft 2014, 378 (403 et seq.). 100 Cf Kersten, Rechtswissenschaft 2014, 378 (390, 406). 101 Cf Kersten, Rechtswissenschaft 2014, 378 (409). 102 Cf Busby, in: Western Literature Association (ed.), Updating the Literary West, 1997, 520. 94

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Germany, at the heart of what was once one of the largest coal-mining areas on Earth. And somehow it might be “fate” that Lliuya’s property, located in the Huaraz region, Peru, is situated below the melting Palcaraju glacier and the swelling Lake Palcacocha. To be born in the Ganges delta area or at the edge of the Sahel, or to be a Norwegian vintner benefitting from global warming103 – all of this might count as “fate”. Further, one could call it “fate” that global warming severely changes landscapes (e.g., California North Coast vineyards devastated by wildfires) and ecosystems (‘ecological spaces’, as it were), resulting in a drastic loss of biodiversity (consider, e.g., corals, sea grasses and kelps annihilated by marine heat waves104). 44 However, today, in the reflective phase of the Anthropocene, Heraclitus’ adage is even more obscure than it might have been 2,500 years ago. Global warming’s spatial hugeness calls into question the notion of “fate”: As mentioned above, the global greenhouse effect is caused by a partly man-made layer of “well-mixed greenhouse gases” in the Earth’s atmosphere (supra mn. 8), which is spanning Essen, Huaraz, the Ganges delta, the Sahel, Norwegian and Californian vineyards ‘at the same time’. In the reflective Anthropocene, viewed from an object-oriented ontology perspective (supra mn. 27), geographic and ecological entities, including man-made countryside, come into the picture as beings that interact with other (human and non-human) beings. For Timothy Morton, global warming, viewed as a hyperobject (supra mns 1, 31), deconstructs ‘space’ as an anthropomorphic concept, as a dubious attempt to safely anchor the human ‘self’ in a deceptively fathomable and ‘present’ (supra mn. 35) constellation of other beings viewed as a ‘space’, a ‘world’, a ‘home’ (supra mn. 27).105 b) Economic, social, ‘cultural’ and ‘identity’ spaces: ‘skewed’ para-environmental justice. And still, human beings do think in spatial metaphors and categories. Contingent constellations of sites, places and beings are interpreted as social, economic, political or legal ‘spaces’. For instance, in the socioeconomic realm, ‘we’ may identify spatial dispersions and accumulations of wealth and poverty and relate them to global warming. Indeed, ‘environmental justice’ approaches to global warming precisely focus on spatially defined inequalities with regard to contributions to as well as disadvantages and benefits from climate change (cf supra mns 16 et seq.). One may identify quite distinctly marked socioeconomic inequalities along the fault line separating the Global North from the Global South106 (however cf mn. 48). Many places in the Global South, among them the Ganges delta, the Sahel and Huaraz, are disproportionately disadvantaged by floods, droughts, glacial melting and other consequences of global warming, whereas many places in the Global North, e.g., the municipality of Essen, disproportionately benefit from activities causing GHG emissions. Moreover, the historical dimension of global warming – different shares in historical GHG emissions – outlined above (supra mns 37 et seq.) acquires spatial shapes in the present. 46 Most ‘environmental justice’ issues with regard to global warming are of a different kind compared to purely local environmental conflicts, e.g., siting decisions about where to carry out locally harmful projects (LULUs – supra mns 16 et seq.). (To be sure, global warming involves some LULU and NIMBY issues, too, e.g., siting decisions about where to locate wind power plants.) Local environmental conflicts commonly may be broken down into encounters of a specific harmful action with specific (socioeconomically defined) vulnerabilities. In contrast, the spatial dimension of global warming justice is more complex. 45

103

Cf Kersten, Rechtswissenschaft 2014, 378 (400). Smale et al., Nature Climate Change 9 (2019), 306. 105 Cf Morton, Dark Ecology, 2016, 10 et seq. 106 Cf (on a descriptive meta level) Walker, Environmental Justice, 2012, 184. 104

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Although one can identify places around the globe that are extraordinarily vulnerable to the negative consequences of global warming (supra mn. 45), it is difficult to identify definite correlations between specific contributions to global warming on the one hand and specific vulnerabilities on the other hand. Thus, thinking in bilateral terms is frustrated. However, as outlined above, environmental justice is not exclusively about justly 47 distributing environmental harm, but also about justly distributing the socioeconomic (financial) costs for protective and adaptive measures (supra mn. 18). On that score, the plaintiff in Lliuya v. RWE has proposed to single out specific shares in the allocation of costs in proportion to the respective shares in historical GHG emissions (supra mn. 3). Lliuya’s claim may be read as the attempt to reduce the multilateral complexities of global warming’s causes and consequences to a tangible bilateral relation between a specific emitter and a specific victim. That may be practically feasible in the exceptional case Lliuya v. RWE since RWE is one of the largest GHG emitters around the globe, thus representing a relevant share in historical GHG emissions. (And notably, Lliuya is supported by the NGO Germanwatch [infra mn. 58] – thus, Lliuya v. RWE as strategic litigation does not meet the classic picture of a bilateral private law suit.) However, there are many more historical emitters, most of them much smaller than RWE. So, by and large, given the multicausal and multilateral complexities of global warming processes, environmental justice might rather be an important factor for (international) political negotiations about how to share the financial burden of global warming. Such political negotiations might be framed and partially guided by – enforceable(?) – international law principles open for global environmental justice concerns. However, it might be rather difficult to find manageable substantive principles. Here, the procedural dimension of environmental justice (supra mn. 21) comes into play. Environmental justice has to aim at overcoming political inaction of social (and political) groups ‘worse situated’ – another ‘traditional’ tenet of the environmental justice framework (supra mn. 20). In the age of globalised capitalism, intense migration and the formation of a 48 cosmopolitan elite, socioeconomic spatial dispersions may be more aptly described by the metaphor of a marble cake than by clear-cut geographic and social boundaries. Increasingly, in the Global South as well as in the Global North, many different degrees of global warming contributions and vulnerabilities get fairly mixed up. Thus, an elaborated ‘environmental justice’ framework should not only focus on socioeconomic dispersions from a geographical-socioeconomic macro perspective (Global North v. Global South), but also from a more nuanced micro perspective, paying attention to the different socioeconomic statuses of, e.g., people in world cities, in exurbs and in rural areas around the globe – ‘glocal’ (global and local) thinking or ‘skewed’ para-environmental justice as it were. Additionally, such a glocal perspective might coincide with growing awareness of the dispersion of ‘cultural’ spaces and ‘identity’ spaces, acknowledging, e.g., the existence of specifically ‘racialised’ or ‘genderised’ spaces around the globe and, thus, integrating minority groups’ interests and knowledge (supra mns 19, 37) in questions of global warming justice. c) Political and legal spaces I: nation-states – insufficient, but still essential. In the 49 Anthropocene (supra mn. 28), the spatial order of the political ‘realm’ is getting fairly churned up. The metaphor of (glocal) marble cakes for spatial socioeconomic structures (supra mn. 48) directly points to the difficulties involved in the task of assigning social (and potentially political) groups and places to each other. Relevant keywords are ‘global governance’ and ‘cosmopolitical (post‐)democracy’.107 At this point, it becomes 107 Cf Kemper, Politische Legitimität und politischer Raum im Wandel, 2015, 310 et seq. (on global governance), 318 et seq. (on unbounded cosmopolitical spaces), 332 et seq. (on post-democratic spaces).

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apparent that the questions of Anthropocenic ‘spaces’ and ‘agencies’ are inextricably linked to each other. To be sure, the nation-state remains a potent spatially defined agent for the politics of global warming (infra mns 50 et seq.). However, global warming emphasises the importance of political spaces smaller as well as larger than the nationstate, too (infra mns 52 et seq.). 50 The on-going potency of the nation-state as an important agent in politics (and litigation) concerning global warming becomes apparent when we look at the Dutch Urgenda litigation: The Urgenda Foundation, a citizens’ platform (infra mns 51, 58), sued the State of the Netherlands in the Rechtbank Den Haag (District Court), Chamber for Commercial Affairs, in order to compel the government to intensify their efforts to reduce Dutch GHG emissions. Urgenda’s suit was successful. Even though the court did not deduce specific (‘hard’) constitutional rights to climate change mitigation measures from the Dutch Constitution or European Union law, it carried out a (‘soft’) assessment and balancing of interests on the basis of “case law about government liability” in order to determine whether there is a “breach of standard of due care observed in society” on behalf of the Dutch state.108 Ultimately, the court found an “unlawful hazardous negligence on the part of the State” in transgression of the government’s discretion.109 (In the course of its ‘soft’ assessment, the court relied on, i.a., Dutch constitutional law as well as European Union law, e.g., the Charter of Fundamental Rights of the EU and the EU treaty law, and international law, as guidelines.) Urgenda makes clear that the nation-state and its (constitutional, administrative or “state liability”) law may serve as a forum for citizens to urge their own political community towards climate change mitigation. Of course, this presupposes the courts’ willingness to hear such cases. In October 2019, the Verwaltungsgericht Berlin, a lower German court for administrative jurisdiction, opted for a narrow approach to the relevant standing doctrines and dismissed a global warming action brought by organic farmers and Greenpeace against the German Federal Government due to lack of standing.110 51 Nation-states keep a more fundamental function, which is at the bottom of their (potential) role in global warming litigation as exemplified by the Urgenda case: Nationstates potentially provide democratic forums; they can play an important role for finding solutions to (some) questions of climate justice in processes of democratic lawmaking, especially in national parliaments. Thus, in Urgenda, the Rechtbank Den Haag emphasised the Dutch government’s “extensive [even though not unlimited] discretionary power to flesh out the climate policy”.111 Democratic law-making in nationstates might still be the most important mechanism for the difficult task of addressing – partly uncomfortable and unpopular – ecological long-term responsibilities (supra mn. 40). Where if not here could it be possible to identify, assess and balance the myriad responsibilities and vulnerabilities involved in global warming? Additionally, democratic institutions on the level of the nation-state serve as gateways for international politics (infra mns 56 et seq.). However, there is a structural tension between the bond to the ‘present’ inherent in representative democracy with its periodic elections and time-bound grants of legitimacy (Herrschaft auf Zeit) on the one hand and long-term responsibilities for future generations on the other hand.112 Additional to 108

Rechtbank Den Haag, Judgment of 24 June 2015, C/09/456689, HA ZA 13-1396, mn. 4.53. Rechtbank Den Haag, Judgment of 24 June 2015, C/09/456689, HA ZA 13-1396, mn. 4.53 et seq. 110 VG Berlin, Judgement of 31.10.2019, VG 10 K 412.18. 111 Rechtbank Den Haag, Judgment of 24 June 2015, C/09/456689, HA ZA 13-1396, mn. 4.74. 112 Cf Kloepfer, in: Gethmann/Kloepfer/Nutzinger, Langzeitverantwortung im Umweltstaat, 1993, 22 (22 et seq.); Appel, Staatliche Zukunfts- und Entwicklungsvorsorge, 2005, 87. 109

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specific institutions in charge of future concerns (sustainability commissions, etc.)113 and nuanced instruments of participatory and direct democracy114, it might require precisely Urgenda-style global warming litigation to force uncomfortable items on the political agendas of nation-states and press or maybe support legislators in their climate policy ambitions.115 Additionally and partly cumulatively, NGOs and citizens’ platforms may serve as catalysing agents – be it as lobbyists, be it in litigation as the Urgenda Foundation’s work exemplifies (supra mn. 50). d) Political and legal spaces II: polycentrism, (g)local communities, federalism 52 and supra-nationalism. Even though nation-states remain important political agents in the Anthropocene, the socio-economic and ‘cultural’ spaces of global warming such as ‘world cities’ (supra mn. 48), let alone the vast geographical-ecological space formed by the Earth’ atmosphere (supra mn. 44), simply do not match the boundaries of nationstates. Thus, in order to remain capable of acting politically in the Anthropocene, we need political agents and legal structures beyond the nation-state – both ‘above’ (infra mns 55 et seq.) and ‘below’ (infra mns 53 et seq.) the level of the nation-state. Addressing global warming is a “multiscalar problem” (Hari M. Osofsky), thus requiring the combination of policy answers of many different scales to be negotiated and implemented in differently sized political spaces through a “polycentric approach” (Elinor Ostrom):116 Given global warming’s vastness, it might seem counter-intuitive to look for relevant 53 political agents ‘below’ the level of the nation-state. However, traditionally, the spatial aspect of environmental justice is to a large degree about subsidiarity and localism.117 Nowadays, with respect to the ‘glocal’ intricacies of the socio-economical and cultural spaces of global warming (supra mn. 48), local actors ‘still’ have a word to say. This is true for ‘world cities’ collaborating in global warming mitigation and adaption efforts in networks such as C40, a rather exclusive group of mega cities and smaller innovator cities118, as well as for rural municipalities dealing with NIMBY conflicts about the siting of, e.g., wind power plants and decentralised energy supply infrastructure (supra mns 16 et seq., 46). Federalism as an especially elaborated manifestation of sub-national political differ- 54 entiation may serve as another potent factor in enhancing global warming policy. Federalism potentially provides additional forums – and agents – for global warming legislation and litigation. However, as federalism in the United States of America illustrates, there may be frictions between rivalling Rechtsregime (supra mn. 7): The U.S. Supreme Court decided that public nuisance claims, i.e., litigation based on tort law, by states (or local governments) are displaced by the regime of federal administrative law established under the Clean Air Act (CAA).119 This makes the Environmental Protection Agency (EPA), which is to a large degree responsible for enforcing the CAA, the main actor in U.S. global warming policy. Then again, administrative law under the CAA entails intricate cooperative federalism implications, which potentially have a litigation 113

Cf Kahl, Nachhaltigkeitsverfassung, 2018, 105 et seq. Cf Kahl, Nachhaltigkeitsverfassung, 2018, 55 et seq.; Kahl, in: Kahl (ed.), Nachhaltigkeit durch Organisation und Verfahren, 2016, 1 (20 et seq., 32 et seq.). 115 Cf Hahn, Umwelt- und zukunftsverträgliche Entscheidungsfindung des Staates, 2017, 331 et seq. (proposing a nuanced standard for judicial review of legislative acts with regard to sustainability). 116 Osofsky, in: Burns/Osofsky (eds.), Adjudicating Climate Change, 2009, 129 et seq.; Ostrom, A Polycentric Approach for Coping With Climate Change, 2009; Aust, Das Recht der globalen Stadt, 2017, 281 et seq. 117 Cf Salzman/Thompson, Environmental Law and Policy, 4th ed., 2014, 43 et seq. 118 Cf Aust, Das Recht der globalen Stadt, 2017, 293 et seq. 119 American Electric Power v. Connecticut, 564 U.S. 410 (2011); cf Salzman/Thompson, Environmental Law and Policy, 4th ed., 2014, 168 et seq.; Spitzer/Burtscher, JETL 2007, 137 (145 et seq.). 114

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dimension: In Massachusetts v. EPA (2007) the U.S. Supreme Court affirmed Massachusetts’ standing in a lawsuit that aimed at forcing the federal agency EPA to (ascertain whether it is statutorily obliged to) address global warming under the CAA. 55 It is quite plausible to turn to political levels ‘above’ the nation-state in order to find relevant agents in climate change policy. On an intermediate level, (sub‐)continental economic communities and unions provide potential forums for addressing global warming, particularly with regard to its socio-economic implications. Above all, the European Union, a supra-national organisation, stands as the poster child for an attempt to parallelise socio-economic and political spaces in ‘functional integration’. In its Urgenda decision, the Rechtbank Den Haag intensely relied on EU law in specifying the standard the Dutch government has to meet in order to fulfil its duty of care with regard to global warming mitigation (supra mn. 50). Besides, there are attempts to establish global warming litigation on the level of the EU itself. In Carvalho et alii v. Parliament and Council, an action for annulment under Article 263 TFEU, several farmers and owners of small tourism businesses from different rural areas around the globe challenged three EU legislative acts addressing global warming for not being ambitious enough to meet the binding requirements of EU fundamental rights and international treaty law (especially the 2015 Paris Agreement). The General Court of the EU (EGC) dismissed the action due to lack of standing under the Plaumann criterion, which requires that the “contested act affects [the plaintiffs] by reason of certain attributes that are peculiar to them or by reason of circumstances in which they are differentiated from all other persons, and by virtue of these factors distinguishes them individually”.120 e) Political and legal spaces III: pluralist globalism(s): UNFCCC, IPCC, “extrastatecraft”, international NGOs, conflict of laws. Being the global phenomenon par excellence, anthropogenic climate change additionally – not exclusively (supra mn. 52) – calls for strong political forums on the global scale. Given the vast socioeconomic, ‘cultural’ and political diversity around the globe, it is extremely difficult to imagine how ‘we’ could create institutions that can legitimately speak for what one might call the “Anthropos”, i.e., some embodiment of humankind as a central agent in the Anthropocene (supra mn. 28).121 Neither “a (directly) democratically elected World Environment Council [nor] an (appointed) International Court of the Environment”122 seem to be within the range of possible institutional arrangements for the next decades to come. Instead, the major part of transnational global warming policy-making has to get carried out by inter-national foreign affairs and inter-national organisations – the United Nations Framework Convention on Climate Change (UNFCCC) and the Intergovernmental Panel on Climate Change (IPCC) being the most important forums. 57 From the perspectives of – ecologically aware – sustainability and environmental justice (supra mn. 31) the UNFCCC’s mission is overwhelmingly complex; it is obvious that this multifarious task requires engagement of more than one single institution such as the UNFCCC. What ‘we’ need – besides multiscalar climate action in local, regional, national and supra-national spaces (supra mns 52 et seq.) – are pluralist globalism(s). Pluralist globalism(s) can come along formally as well as informally. Informal – and often hidden – constellations of power are set up around large-scale infrastructures such as energy supply or broadband data networks. These infrastructures – constellations situated inside as well as outside the ‘realm(s) of the law’ and crossing the public-private 56

120 EGC, Order of 8 May 2019, T‐330/18, mn. 45 et seq.; currently on appeal: ECJ, C-565/19 P; for a critique of the Plaumann criterion cf Winter, ZUR 2019, 259 (266 et seq.). 121 Cf Kersten, Rechtswissenschaft 2014, 378 (394), with references to Latour, Politiques de la nature. Comment faire entrer les sciences en démocratie, 1999. 122 Low/Gleeson, Justice, Society and Nature, 1998, 26 et seq.

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divide – have been described as ethically ambivalent123 “extrastatecraft” (Keller Easterling).124 Whoever wants to have a say in the management of the causes and consequences of global warming has to address (‘glocal’) infrastructure, which is at the ‘bottom’ of the interplay of technical development, social integration, political power and ecology125. Within the scope of globalist approaches addressing climate change, global warming 58 litigation may be one component among others. Here, too, one can find formal structures as well as informally-formally hybrid (infra‐)structures. The intricate regime of conflict of laws provides an example for formal structures of global climate change litigation. Conflict of laws doctrines make it possible to have – spoken spatiallymetaphorically – eversions or convexities of domestically rooted legal rules. In Lliuya v. RWE, the Peruvian plaintiff is suing the German-based business corporation RWE under German law, i.e., under “the law of the country in which the event giving rise to the damage occurred” (Art. 7 EU Rome II Regulation). Besides, Lliuya v. RWE exemplifies the workings of some of the informal infrastructures of litigation: Consider the role of the globally active NGO Germanwatch e. V., which is supporting the plaintiff (supra mns 4, 47) in order to provide environmental justice in the form of approximately equal opportunities in court and, thus, to some extent playing the role of Homo Sapiens luxus (supra mn. 29). Globally networked scientists and expert witnesses provide more basic litigation infrastructure.

V. Coda: “more time tunnels of different sizes” During the ride through some times (supra mns 32 et seq.) and spaces (supra 59 mns 43 et seq.) of global warming, we encountered a multitude of relevant agents. Global warming agencies from the past, the present and the future are framed geographically, ecologically, (socio‐)economically, politically and legally. The range of global warming agents encompasses historical agents such as patriarchal pioneers of industrialisation or minorities that have been structurally suppressed for centuries in the machineries of fossil-fuelled industrialisation (supra mn. 37), future agents such as unborn generations (supra mn. 40), non-human agents such as “well-mixed greenhouse gas”, Californian and Norwegian vineyards or corals, sea grasses and kelps (supra mn. 43) as well as tightly networked agents in the workings of “extrastatecraft” such as transnationally active energy suppliers and NGOs (supra mns 57 et seq.). The foregoing catalogue of agents somehow insinuates that it might be easy to 60 ethically categorise the different agents of global warming in a Manichaean manner, contrasting villains and victims of global warming. To be sure, this is true for some constellations. However, in many everyday situations the difference between ‘active’ roles (‘villains’) and ‘passive’ roles (‘victims’) may be delusive.126 One and the same agent possibly plays different roles on the stage(s) of global warming. At any rate, there are almost never easy solutions to global warming conflicts. Reconsider the conflict underlying Lliuya v. RWE: if one takes the Anthropocenic “culture of conflicts” described by Jens Kersten (supra mns 29 et seq.) seriously, the relief sought by the plaintiff – protection by means of “sustainably” draining Lake Palcacocha (supra mn. 3) 123

Cf Neugärtner, Rechtswissenschaft 2017, 461 (471 et seq.). Easterling, Extrastatecraft. The Power of Infrastructure Space, 2014, 15 (without express reference to global warming). 125 Cf Kersten, Rechtswissenschaft 2014, 378 (409). 126 Cf Morton, Realist Magic, 2013, 182. 124

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– might be viewed as rather oppressive vis-à-vis the agent Lake Palcacocha and, at least, ignorant of the “fate” (supra mns 43 et seq.) of the agent Palcaraju glacier. 61 Some of the agents listed above may still appear ‘strange’. They call for institutional, legal and doctrinal amendments and innovations. The overall task is vast: it is necessary to integrate social, economic and ecological thought (supra mn. 12), to acknowledge aspects of reparative justice by evaluating the historical wrongs related to global warming (supra mns 37 et seq.), to open considerations for the interests of people (especially minorities) ‘worse situated’ locally as well as globally (supra mns 45 et seq.) and to discover the myriad ecological conflicts among human as well as non-human beings in dynamic forms of resilience and coping (supra mn. 42). The foregoing investigations showed that different forms of litigation – actions against private agents (supra mns 4, 39, 47, 58) as well as actions against public agents (supra mns 40, 50, 54 et seq.) – can (and should) play a facilitating, spurring role in this multiscalar endeavour. However, the inquiry also revealed that the role of global warming litigation is necessarily a limited – but indispensable – one (supra mns 39 et seq., 47, 50, 54 et seq., 58). Anthropocenic ecological justice discourse requires “amazement, open-mindedness, and wonder [… as well as] doubt, confusion, and scepticism.”127 We need some experimentation and instinct (Fingerspitzengefühl) to find “more time tunnels of different sizes”128 – aesthetically, politically and legally129. 127

Morton, The Ecological Thought, 2010, 2. Morton, Dark Ecology, 2016, 113. 129 Cf Neugärtner, myops 2018, 4 (12, in n. 1) (putting into play “law and the humanities as interart studies” with regard to environmental policy). 128

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B. Climate damages and the ‘Polluter Pays’ Principle Bibliography: Beyerlin/Marauhn, International Environmental Law, Hart/Beck 2011; Bugge, The Polluter Pays Principle: Dilemmas of Justice in National and International Contexts, in: Ebbeson/Okowa (eds.), Environmental Law and Justice in Context, Cambridge University Press 2009, p. 411; Bugge, The Principles of “Polluter Pays” in Economics and Law, in: van den Berg/Eide (eds.), Law and Economics of the Environment, Juridisk 1996, p. 54; Dupuy/Viñuales, International Environmental Law, 2nd ed., Cambridge University Press 2018; Dworkin, Taking Rules Seriously, Harvard University Press 1977; Epiney, Umweltrecht der Europäischen Union, 4th ed., Nomos 2019; Frenz, Das Verursacherprinzip im Öffentlichen Recht, Duncker & Humblot 1997; Gaines, The Polluter-Pays Principle: From Economic Equity to Environmental Ethics, 26 Tex. Int. L. J. 463, 1991; International Union for the Conservation of Nature and Natural Resources/International Council of Environmental Law (eds.), Draft International Covenant on Environment and Development, 5th ed. IUCN 2015; Kaswan, Adaptation justice, in: Farber/Peeters (eds.), Climate Change Law, Edward Elgar 2016, p. 605; Kettlewell, The Answer to Global Pollution? A Critical Examination of the Problems and Potential of the Polluter-Pays Principle, 3 Col. J. Int. Env. L. & Pol. 129, 1992; Martin, Principles and Rules, in: Krämer/Orlando (eds.), Principles of Environmental Law, Edward Elgar 2018, p. 13; Mayer, The International Law on Climate Change, Cambridge University Press 2018; Mayer, The Place of Customary Norms in Climate Law: A Reply to Zahar, 8 Climate Law 261, 2018; Mayer, The Applicability of the Principle of Prevention to Climate Change: A Response to Zahar, 5 Climate Law 1 (2015); Orlando, Liability, in: Krämer/Orlando (eds.), Principles of Environmental Law, Edward Elgar 2018, p. 272; Proelss, Polluter-Pays, in: Aguila/Viñuales (eds.), A Global Pact for the Environment – Legal Foundations, Cambridge University Press 2019, p. 85; Rehbinder, Politische und rechtliche Probleme des Verursacherprinzips, Erich Schmidt Verlag 1973; Rehbinder, Extra-territoriality of pollution control laws from a European perspective, in: Handl/Zekoll/Zumbansen, Beyond Territoriality. Transnational Legal Authority in an Age of Globalization, Martinus Nijhoff 2012, p. 127; de Sadeleer, Environmental Principles – From Political Slogans to Legal Rules, Oxford University Press 2002; de Sadeleer, The Polluter-Pays Principle in EU Law – Bold Case Law and Poor Harmonisation, in: Backer/ Fauchald/Voigt (eds.), Pro Natura, Festskrift til Hans Christian Bugge, Universitetsforlaged 2012, p. 405; Sands/Peel, Principles of International Environmental Law, 4th ed., Cambridge University Press 2018; Schwartz, The polluter-pays principle, in: Fitzmaurice/Ong/Merkouris (eds.), Research Handbook on International Environmental Law, Edward Elgar 2010, p. 243; Schwartz, The Polluter-Pays Principle, in: Krämer/Orlando (eds.), Principles of Environmental Law, Edward Elgar 2018, p. 260; Scott, Unilateralism, extraterritoriality and climate change, in: Farber/Peeters (eds.), Climate Change Law, Edward Elgar 2016, p. 167.; Wolfrum/Langenfeld, Environmental Protection by Means of International Liability Law, Erich Schmidt Verlag 1999; Zahar, Methodological Issues in Climate Law, 5 Climate Law 25, 2015; Zahar, The Contested Case of Climate Law, 8 Climate Law 244, 2018.

Contents I. Introduction ..................................................................................................... II. Historical development and state of recognition..................................... 1. Historical development ............................................................................. 2. State of recognition .................................................................................... III. Legal nature...................................................................................................... 1. Principle or rule? ........................................................................................ 2. Legal effects.................................................................................................. IV. Functions .......................................................................................................... 1. Diversity of functions ................................................................................ 2. Internalisation vs. instrumental orientation ......................................... 3. Redistribution of costs vs. material responsibility .............................. V. Contents and limits ........................................................................................ 1. Generalities................................................................................................... 2. Protected assets ........................................................................................... 3. Identification of the polluter (originator) ............................................. 4. Causation and accountability................................................................... 5. Delimitation from the common burden principle..............................

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Part 1. Fundamental questions VI. Instruments ...................................................................................................... 1. Generalities................................................................................................... 2. Liability in particular ................................................................................. VII. Conclusion........................................................................................................

37 37 39 46

I. Introduction As a consequence of increased emissions and stocks of greenhouse gases (GHGs), especially carbon dioxide (CO2) and methane, in the atmosphere and the decrease of the absorption capacity of natural sinks the earth is already now confronting considerable climate damage. According to the assessment of the scientific community, climate damage will become massive unless the increase of global warming will be kept at 2 or even 1.5 degrees in the foreseeable future as agreed upon in the Paris Agreement on Climate Change. The sources of GHG emissions are quite varied. Industry and public utilities, traffic, buildings, land use and land use changes, especially agriculture, deforestation and forest and peat fires are among the most important sources. Not only identifiable emitters or land users, but ultimately all inhabitants of the earth contribute in some respects to global warming. The resulting climate damage ranges or may range from the submerging of low lying islands and coasts, extreme weather episodes, the melting of ice in the Arctic and Antarctica, the melting of glaciers elsewhere, droughts and increases of desertification to biodiversity losses. 2 Tackling climate damage requires a combination of measures for mitigation, adaptation and compensation. The national policy-makers and legislators possess a wide margin of political discretion with respect to the selection of sectors of the national economy for primary action and the choice of instruments. Guidance for devising the relevant measures may be provided by the fundamental principles of environmental policy that are widely recognized throughout the world. One of these principles is the ‘polluter pays’ principle (PPP). It was formulated when climate change did not yet constitute a major problem on the agenda of environmental policy. However, this does not rule out that it can address new environmental problems such as the consequences of climate change. 1

II. Historical development and state of recognition 1. Historical development 3

According to general conviction1, the OECD Recommendation on the Polluter Pays Principle of 1972,2 which was refined in the following years by two further recommendations,3 constitutes the first recognition of the PPP as a guide principle of environmental policy. Although there have been national predecessors in Japan and Germany,4 1 See, e.g., Schwartz, in: Fitzmaurice/Ong/Merkouris (eds.), Research Handbook on International Environmental Law, 2010, p. 243 (244 et seq.); id., in: Krämer/Orlando (eds.), Principles of Environmental Law, 2019, p. 260 (260‐61); Proelss, in: Aguila/Viñuales, A Global Pact for the Environment – Legal Foundations, 2019, p. 85 (86). 2 OECD, Guiding Principles concerning International Environmental Economic Aspects of Environmental Policies, C (72) 128; cf Bugge, in: van den Berg/Eide (eds.), Law and Economics of the Environment, 1996, p. 54 (72 et seq.). 3 OECD, The Implementation of the Polluter-Pays Principle, C (74) 223; id., The Application of the Polluter Pays Principle to Accidental Pollution, C (89) 99. 4 Japan: Law on Cost Bearing of Pollution Control Public Works of 1970 (Law No. 133/1970); Germany: Umweltprogramm der Bundesregierung, BT-Drucks. VI/2710 (1971), p. 10.

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it is safe to say that the OECD Recommendation of 1972 has been crucial for the gradual recognition of the PPP at national, supranational and international levels. The PPP originally was conceived as an economic principle that was oriented at the concept of internalisation of external costs as developed by the economist Arthur Cecil Pigou (“Pigouvian tax”).5 However, the PPP has gradually evolved to a legal concept. In this process it has undergone important modifications and developed several variants.

2. State of recognition In most countries the PPP is just recognized as a political principle that should be 4 considered in environmental policy-making, legislation and implementation. In this form it constitutes a self-commitment of government that is not legally binding but has a strong political and social authority. However, there are also a number of laws at supranational and national levels that explicitly recognize the PPP or a particular variant of the PPP as a legal principle. In the European Economic Community the PPP was first recognized politically by the Environmental Action Programme of the Commission of 1973 and in particular the Council Recommendation on cost allocation of 19756 which still serves as guidance for interpreting the principle. Since the Maastricht Treaty of 1987, the PPP has been one of the legal principles that have to be applied in environmental policy and legislation of the European Economic Community and later on the European Community and the European Union. It is presently laid down in Art. 191 (2) TFEU. Moreover, there are a number of EU directives addressed to the member states that explicitly refer to the PPP. This is in particular true for the Waste Framework Directive (Art. 14), the Waste Deposit Directive (Art. 10) and the Environmental Liability Directive (Art. 1).7 The Water Framework Directive (Art. 9)8 may be relevant for adaptation to climate damage. The Emission Trading Directive9 which only incorporates the PPP is the most relevant directive with respect to the mitigation of climate damage. At national level, important sources of recognition of the PPP as a legal principle in 5 Europe are the Environmental Code of France (Art. L 110‐1[2]) and the general environmental protection acts of Switzerland (Art. 2) and Portugal (Art. 3[d]). The Portuguese law is most far-reaching. It obliges the polluter to bear the costs of all activities that cause environmental damage as well as the costs of internal measures for the prevention and control of environmental damage. Further examples of legislative recognition of the PPP include Poland, the Belgian Region of Flanders and – in the shape of general duty of due diligence or a duty to remediate or compensate environmental damage – the Netherlands, the Czech Republic and the Belgian Region of Wallonia.10 5 The Pigouvian tax is not uncontroversial among economists. A competing concept is the Coase theorem that defines the problem of pollution as one of a use conflict and considers both the polluter and the victim as originators; see, e.g., Bugge, Law and Economics p. 62 et seq. 6 Commission, Environmental Action Programme, OJ 1973 C 112/1; Council Recommendation 75/436/ EEC of 3 March 1975 regarding cost allocation and action by public authorities on environmental matters, OJ 1975 L 194/1. 7 Directive 2008/98/EC of the European Parliament and the Council on Waste, OJ 2008 L 312/3; Council Directive 1999/31/EC on the landfill of waste, OJ 1999 L 182/1; Directive 2004/35/EC of the European Parliament and the Council with respect to the Prevention and Compensation of Environmental Damage, OJ 2004 L 143/36. 8 Directive 2000/60/EC of the European Parliament and the Council establishing a framework for Community action in the field of water policy, OJ 2000 L 327/1. 9 Directive 2003/87/EC of the European Parliament and the Council establishing a scheme for greenhouse gas emission allowance trading within the Community, OJ 2003 L 275/32, as amended. 10 Poland: Art. 7 of the Environmental Protection Act; Flanders: Art. 1.2.1 [2] of the Decree on Environmental Policy; Netherlands: Art. 1.1a Law on Environmental Policy; Czech Republic: Art. 17 [1], Art. 19 of the Environmental Protection Act; Wallonia: Art. D 3 no. 2 of the Environmental Protection Act.

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Outside Europe, there are also various examples of an explicit recognition of the PPP, even though mostly in the shape of an ex post variant of the PPP. This is true for Japan, Kenya, Brazil, Costa Rica and – based on judicial development of the law – India.11 South Africa and the Canadian Province of Quebec possess more extensive regulation on the PPP. South Africa (Sec. 2 [4] [p] of the National Environmental Management Act) combines an ex ante and ex post version of the PPP imposing the costs for the prevention, control and minimisation of future pollution and for compensation of environmental damage on the originator. Quebec (Art. 6[o] and [p] of the Law on Sustainable Development) adds to its ex ante concept of the PPP a requirement of internalising the external costs of the whole product life cycle, even though only in the shape of a duty of the executive to take into account the PPP. 7 As regards international law, the PPP is neither a principle of customary law nor a general principle of law in the meaning of Article 38 of the Statute of the International Court of Justice. The view expressed by some European regional conventions that the PPP is a general principle of international environmental law,12 does not have sufficient support in state practice and legal literature.13 The PPP has been recognized in various soft law documents, especially Principle 16 of the Rio Declaration on Environment and Development14 and the OECD recommendations on the PPP.15 However, only few global conventions expressly recognize the PPP. The Paris Convention on Climate Change of 2015 does not mention it. By contrast, there are numerous regional environmental agreements, especially in Europe, that affirm the PPP. Many of these agreements just name it in their preamble, whereas others have inserted it in operative provisions on goals, principles or obligations. All told, one can state that in Europe the PPP has a firm legal status. However, it is also true that it lacks universal recognition.16 6

III. Legal nature 1. Principle or rule? 8

The PPP may be simply a political principle that does not have any legal effects. Where the PPP is established by a legal text such as a law or a convention, the denomination of the PPP in the relevant legal text as a “principle”, which is quite common, suggests that the PPP constitutes a principle in the legal sense – as opposed to a rule. It would need strong arguments not to follow this legislative classification. Where the relevant legal text lacks such a denomination, the qualification must be made by way of interpretation. There are a number of criteria to qualify a legal norm as a principle and distinguish it from a rule. These criteria are not uncontroversial and make the 11 Japan: Law on Cost Bearing for Pollution Control Public Works, Law No. 1133/1970; Kenya: Sec. 3 [5] [e] of the Environmental Management and Coordination Act; Brazil: Art. 4 [8] of the Act on National Environmental Policy; Costa Rica: Art. 2 [d] of the Organic Act on the Environment; India: Supreme Court, Vellore Citizens’ Welfare Forum v. Union of India, All India Reports 1996 SC 2715 (leading case). 12 London Convention on Oil Pollution Preparedness, Responsibility and Cooperation of 1990, 30 ILM 733 (1991); ECE Convention on Transboundary Effects of Industrial Accidents of 1992, 31 ILM 1330 (1992) and the associated Liability Protocol regarding the Protection of Transboundary Waters of 2003 (all in the preamble). 13 Proelss, p. 89 with further references. 14 31 ILM 1416 (1992). 15 Supra fns 2 and 3. 16 Proelss p. 89; Sands/Peel, Principles of International Environmental Law, 4th ed. 2018, p. 240‐41 (but see p. 123); contra Schwartz, Principles p. 264; furthermore Indian Supreme Court (fn. 11).

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qualification quite difficult.17 First of all, the function of the norm is relevant. Principles only argue in one direction; they do not determine a particular decision but allow for a plurality of decisions. By contrast, a rule contains a definite command or empowerment.18 Moreover, a high degree of abstractness would suggest a qualification as a principle. Finally, the degree of legal certainty and definiteness plays a role. Where there are many potential variants of substantive content of a legal provision this would speak for qualification as a principle. Most of these criteria are met by the PPP. As a matter of fact, it is the clearly 9 predominant understanding that the PPP is a principle and not a rule.19 The classification of the PPP as a principle implies that a certain degree of balancing divergent values and interests is admissible or even required.20 How far the political discretion reaches, depends on the relevant legal text. The PPP is not necessarily strictly binding, it may be just an approach or a norm of consideration.21

2. Legal effects The PPP may have quite different legal effects. Normally, the PPP is a principle 10 addressed to environmental policy-makers and, where laid down in the Constitution or other higher ranking norm, the legislature. This is the core effect of the PPP. A good example is presented by Art. 191 [2] TFEU. According to this provision, the PPP is one of the principles that apply to environmental policy-making including legislation at EU level. It does not establish an empowerment of the EU institutions to intervene in the activities of individual enterprises or consumers. Nor is it binding on the member states unless incorporated in specific environmental directives. The concentration on policymaking and legislation does not rule out that the PPP could also have effects on the other powers, that is, the executive and judiciary. As regards the judiciary, the PPP may serve as a standard for scrutinizing the legality and guide the interpretation of secondary legislation. This is in particular true where the PPP is laid down in a goals provision of an implementing instrument.22 In the relationship to individual enterprises and consumers, the PPP does not 11 normally have any direct legal effects. Such effects are only triggered when the PPP is incorporated in specific legal norms that are addressed to individuals. For instance under EU law, depending on the wording and objective of a directive that incorporates the PPP and its transposition into national law, individual enterprises and consumers may be obliged or entitled by the PPP. A different problem arises where the PPP is not specifically laid down in an operative 12 provision of an environmental law as a goal or principle, but is only incorporated in the sense that the law refers to it in the preamble or is simply based on it. The relevant law does not require the application of the PPP but only of its rules that are an expression of the PPP. One can denominate this variant of the PPP as a “structural” principle, “guide” 17 See de Sadeleer, Principles of Environmental Law – From Political Slogans to Legal Rules, 2002, p. 251 et seq.; Martin, in: Krämer/Orlando (eds.), Principles of Environmental Law, 2018, p. 13 (14 et seq.); Sands/Peel, p. 199‐201. 18 Dworkin, Taking Rules Seriously, 1977, p. 24, 26; de Sadeleer, Principles p. 273; Martin (fn. 17), p. 17‐18. 19 Contra regarding international law: Proelss, p. 88; Beyerlin/Marauhn, International Environmental Law, 2011, p. 39. 20 de Sadeleer, Principles p. 30‐31, 259, 272‐73; Martin (fn. 17), p. 16. 21 Schwartz, Principles p. 264. 22 ECJ Case C-129/16 Túrkevej Tejtermelö Kft. ECLI:EU:C:2017:547, mns. 36 et seq.; Case C-378/08 ERG ECLI:EU:C:2010:126, mns. 46, 57‐58, 67; Case C- 534/13 Fipa ECLI:EU:C:2015:140, mns. 40‐42; to the same extent de Sadeleer, Principles p. 31.

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principle or – in the case of simple incorporation – an “implicit” principle.23 However, this does not mean that the PPP is just an element of systematic understanding of the law and lacks any legal relevance. Rather, it legitimizes the relevant rules and may guide their interpretation. 13 The PPP in international treaty and soft law may be a legal principle that has to be applied by the parties in implementing a convention. In a softer, more frequently used version the PPP it is just an approach or a duty to consider.24 The latter is in particular true for Principle 16 of the Rio Declaration but also for some regional agreements.25 Where the PPP is only contained in the preamble or a goals provision of the agreement or incorporated without any reference to it, the PPP merely serves as guidance for interpreting the agreement. 14 Normally, the PPP is addressed to the parties to the relevant international agreement and applies to their domestic sphere. In other words, the agreement requires action at domestic level for transposing the PPP, normally with legal effects on enterprises and individuals. It is an open question whether the PPP in its application to the domestic sphere of states also addresses transboundary effects. Some liability conventions regulate transboundary pollution. In any case, the PPP arguably does not mandate the recognition of an extraterritorial duty of originators to protect persons who suffer environmental damage outside the national territory. It does not either legitimize the extraterritorial application of domestic environmental laws to activities of originators performed abroad that cause environmental damage on the national territory (effects principle).26 In both cases, the national and supranational rules on conflict of laws, fundamental rights and customary international law contain more appropriate criteria. This applies in particular to climate damage. As regards imported products, the application of domestic product requirements or charges for climate protection can in principle be justified by the PPP, the limits being set by the WTO regime of international trade.27 15 The PPP may theoretically also apply to the relationship of states to one another. A more recent discussion on this question specifically relates to global climate policy. Some authors posit that the PPP is implicit in the Paris Convention and, in the shape of an obligation to put a price on GHG emissions, even constitutes the lead principle of global climate policy.28 As a pronouncement on existing international law, this is hardly tenable. There are no precedents in treaty law for such a legal effect of the PPP. In particular, the Paris Convention on Climate Change of 2015 does not mention the PPP because there was no agreement on which version of it to accept. The “loss and damage” mechanism under Art. 8 of the Convention is not predicated on the PPP. However, the principle of common but differentiated responsibilities considering respective capabilities (CBDR) has always contained elements of the PPP since it is based on the concept of responsibility, even though not in the form of simple redistribution of costs.29 Therefore, what one should advocate is not so much a key role for the PPP in the 23

Bugge, Law and Economics p. 58, see also de Sadeleer, Principles p. 22; Martin (fn. 17), p. 19‐20. Schwartz, Principles p. 264. 25 E.g., London Dumping Protocol to the Convention on the Prevention of Marine Pollution by Dumping of Waste and Other Matter of 1996, Art. 3 [2], 36 ILM 1 (1997); Carpathians Convention of 2003, Art. 2 [b], www.carpathianconvention.org/the-convention-17.html. 26 See for this problem: Scott, in: Krämer/Orlando (eds.), Principles of Environmental Law, 2018, p. 167 (171 et seq.); Rehbinder, in: Handl/Zekoll/Zumbansen, Beyond Territoriality, 2012, p. 127 (128 et seq., 157 et seq.). 27 See GATT, US – Taxes on Petroleum and Certain Imported Substances, Panel Report of 17 June 1987. 28 Zahar, 9 Climate Law XXX (2019). 29 Bugge, Justice p. 424‐25. 24

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global climate change regime in lieu of the CBDR but, rather, a further development of the CBDR towards strengthening its PPP element and a growing reliance on the PPP in implementing the Convention at national level. Besides, the no-harm principle (principle of prevention) and state liability for wrongful acts including for transboundary environmental harm provide heads of responsibility that are more protective than the PPP and also have the advantage of being more widely recognized.30

IV. Functions 1. Diversity of functions There is no uniform understanding of the PPP. Rather, one can distinguish between a variety of functions not all of which are uniformly laid down in legal texts or accepted by literature. This complicates the framing of and discussion on many subsequent problems associated to the PPP. The oldest function of the PPP is harmonisation of conditions for competition and investment location, that is, abolition of hidden subsidies of polluters, by means of internalisation of environmental externalities. This was the gist of the original OECD and EEC concepts31 but does no longer play a major role. Apart from the harmonisation function, one can distinguish three functions of the PPP: redistribution, prevention and liability.32 In keeping with the denomination as ‘polluter pays’ principle, the major function of the PPP still is the redistribution of external environmental costs. However, the extent of requisite redistribution is an open question. Redistribution may be either required in the sense of complete or at least far-going internalisation. More frequent is the mere allocation of costs for protective measures mandated by environmental regulation to the polluter. Secondly, the PPP has a preventive function. This is even true for redistribution concepts because they count on the preventive effects of such redistribution. The polluter is expected to take preventive measures up to the point where the marginal costs of such measures are below the costs that are redistributed. The preventive function is explicitly addressed as an aspect of the obligation of the polluter to (also) bear the costs of preventive measures required by environmental laws or conventions. Even environmental liability has a preventive function.33 It may either be explicit insofar as the liability regime entails the obligation of the polluter to take preventive measures in case of imminent harm. Or it may be implicit in that the threat of financial responsibility for future environmental damage may serve as an incentive to alter behaviour and abstain from risky activities. In the long run, it may influence the production and consumption patterns. Thirdly, the PPP has a curative function. One can also speak of an ex post version of the PPP. The curative function of the PPP finds expression in environmental liability, 30 Mayer, 5 Climate Law 1 (7 et seq.) (2015); id., 8 Climate Law 261 et seq. (2018); id., The International Law on Climate Change, 2018, p. 69 et seq., 267 et seq. (in favour of an extended no harm principle); see also Kaswan, in: Farber/Peeters (eds.), Climate Change Law, 2016, p. 605 (611‐12); Sands/ Peel, p. 737 et seq., 746 et seq.; contra Zahar, 5 Climate Law 25 (28 et seq.) (2015); id., 8 Climate Law 244 (247 et seq.) (2018). 31 de Sadeleer, Principles p. 34 et seq.; Schwartz, Research Handbook p. 246; but see Kettlewell, 3 Colo. J. Int. Env. L. 129 (445 et seq., 477‐78) (1992) (PPP requires previous harmonisation). 32 de Sadeleer, Principles p. 34 et seq.; Bugge, in: Ebbeson/Okowa (eds.), Environmental Law and Justice in Context, 2009, p. 411 (413). 33 See also Orlando, in: Krämer/Orlando, Principles of Environmental Law, 2018, p. 272 (273‐74, 285).

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irrespective of its classification as private or public law.34 Some authors suggest that environmental liability might not be an expression of the PPP because it is a separate body of norms that follows its own logic.35 However, the systematically separate regulation of environmental liability in environmental codes or international instruments that is quite common does not militate against classifying it as an instrument of the PPP. Other instruments of the PPP are also regulated in detail in separate or separate parts of environmental laws. Moreover, an OECD recommendation36 generally classifies environmental liability as an instrument of the PPP. Finally, some national, supranational and international legal texts expressly refer, with respect to environmental liability, to the PPP.37 All told, there are good reasons for recognizing the curative function of the PPP and thereby environmental liability as an instrument of the PPP.

2. Internalisation vs. instrumental orientation The origin of the PPP in environmental economics suggests that the gist of the PPP should be complete internalisation of external costs that production processes, products and services cause for the public at large in the shape of pollution, other kinds of environmental degradation and personal damage. The logic of the internalisation concept extends to a new phenomenon like climate damage. However, to the extent that the PPP has emancipated from economics and evolved to a legal principle, the internalisation approach has lost much of its persuasiveness. Moreover, due to conceptual problems, practical difficulties and negative distributional effects, internalisation of external environmental costs strictly according to the Pigouvian concept is not possible. At best one can posit that external environmental costs should be allocated to the polluter as fully as feasible and/or reasonable38. In any case, the legislature has political discretion in implementing the PPP. Approaches of partial internalisation that impose on the polluter some external costs in the form of charges shaped according to their expected incentive function, costs of protective measures (e.g., ambient quality and emission standards, best available technology), liability or voluntary self-commitments by industry are also consistent with the PPP.39 21 Looking at state practice, it deserves attention that a rigorous internalisation approach is extremely rare. The relevant laws, if they define the PPP at all, normally only make the polluter bear the costs of measures for the prevention, reduction and control of pollution as required by law.40 The same is true for states that apply the PPP only as a political principle. The PPP is linked to environmental regulation, more exactly to the instruments devised by the state for protecting the environment (“instrumental” approach). Practically the PPP is equivalent to a mere prohibition of state aids. 20

34 de Sadeleer, Principles p. 24, 37, 48 et seq., 53‐58 ; id., in: Backer/Fauchald/Voigt (eds.), Pro Natura, Festskrift til Hans Christian Bugge, 2012, p. 405 (412) ; Schwartz, Research Handbook p. 249, 251 et seq.; Bugge, Law and Economics p. 413, 420 et seq. 35 Proelss, p. 92. 36 OECD, Accidental pollution (fn. 3). 37 Examples: Environmental Management Act of South Africa, Sec. 2 [4] [p]; EU Environmental Liability Directive, Art. 1; Lugano Convention on Civil Liability for Harm Damage Resulting from Activities Harmful to the Environment of 1999, Preamble, CETS 150 (not yet in force); Kiev Protocol on Civil Liability and Compensation for Damage Caused by Transboundary Effects of Industrial Accidents on Transboundary Waters of 2003, Preamble, UNTC vol. XXVII no. 16 (not yet in force). 38 See Bugge, Law and Economics p. 58 et seq., 65 et seq. 39 Schwartz, Principles p. 249‐50, 262, 265, 267; Bugge, Justice p. 246, 249‐50; Proelss, p. 90; Frenz, Das Verursacherprinzip im Öffentlichen Recht, 1997, p. 35 et seq. As to the question whether the PPP requires illegality of an action or omission of the polluter, see (in the negative) de Sadeleer, Principles p. 38 et seq. 40 Exception: Art. 6(p) of the Law on Sustainable Development of the Canadian Province of Quebec.

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However, normally an element of partial internalisation is added in the shape of environmental liability insofar as it does not hinge on administrative regulation. At international level, the understanding of the PPP as a mandate for internalisation 22 of external environmental costs plays a role in soft law declarations on the PPP, especially Principle 16 of the Rio Declaration. However, already the OECD declarations on the PPP had opted for, and later on at least emphasized, an instrumental concept whereby the polluter has to bear the costs for measures of prevention, reduction and control of pollution ordered by the state. Art. 6 of the Draft International Covenant on Environment and Development41 also follows this understanding. The instrumental concept of the PPP reverts in almost all global and regional conventions that contain language about the content of the PPP, be it in the preamble or operative provisions of the agreement.

3. Redistribution of costs vs. material responsibility The PPP is commonly understood as a principle of allocating the costs of pollution or 23 measures mandated by environmental regulation. These costs are to be redistributed from the (potential) victims of environmental damage and/or the state or taxpayers to the polluter. The denomination “polluter pays principle” or “originator pays principle” reflects this understanding, the denomination “originator principle” in Germany, Austria and Switzerland does not exclude it.42 However, with the gradual emancipation of the PPP from economic thinking and its conversion into a legal principle one has to pose the question as to whether the PPP should not be understood in the sense of material responsibility for environmental harm, the redistribution of costs only being one its elements. Such a development of the PPP would more directly link the PPP to the objective of environmental protection.43 Moreover, it would counteract the frequent criticism of the PPP to the extent that it is tantamount to a license to pollute against payment.44 This criticism certainly is overstated because it ignores the (potential) preventive effects of setting an environmental price on production processes, products and services. However, a modernisation of the PPP in the sense of material responsibility would constitute a more direct response to this criticism and would also underline the ethical foundations of the PPP. In European legal literature the position that the PPP is or at least is also a principle 24 of material responsibility is gaining ground.45 A major contribution to this rethinking of the PPP has been made by the recent case law of the European Court of Justice. While older judgements conceived the PPP as a mere principle of redistribution of costs,46 the recent case law on the Environmental Liability Directive emphasizes the primary responsibility of polluters to take measures of their own for prevention and restoration of environmental damage.47 Rather than separating the obligation to take such measures 41 International Union for the Conservation of Nature and Natural Resources/International Council of Environmental Law (eds.), Draft International Covenant on Environment and Development, 5th ed. 2015. 42 See Art. 2 of the Swiss Environmental Protection Act. 43 In this sense regarding liability Orlando, p. 284. 44 See Schwartz, Principles p. 270; Dupuy/Viñuales, International Environmental Law, 2018, p. 82; de Sadeleer, Principles p. 33, 60; id., Pro Natura p. 418. 45 Schwartz, Principles p. 270; id., Research Handbook p. 248; Frenz (fn. 40), p. 27‐28; Epiney, Europäisches Umweltrecht, 4th ed. 2019, p. 166, 382, 614; already Rehbinder, Politische und rechtliche Probleme des Verursacherprinzips, 1973, p. 34 et seq. 46 ECJ Case C-293/97 Standley ECLI:EU:C:1999:215, mns. 51‐52 ; Case C-1/03 Van de Walle ECLI:EU: C:2004:490, mn. 58; Case C-254/08 Futura Immobiliare ECLI:EU:C:2009:479, mns. 44‐46 ; Case C-188/07 Commune de Mesquer ECLI:EU:C:2008:359, mns. 71‐72, 77‐78. 47 ECJ, Túrkevej Tejtermelö Kft. (fn. 22), mns. 47, 53; ERG (fn. 22), mn. 57.

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and that of bearing their costs, the Court sees both as elements of the PPP. This interpretation is mandated by Art. 1 of the Directive that links the material responsibility of polluters to the PPP. It has also found expression in more recent liability conventions which incorporate the PPP.48 25 Material responsibility does not mean that the PPP should become the lead principle of environmental policy including climate protection policy that determines its directions and stringency. It only means that polluters do not only have to pay, but are also responsible for taking measures of prevention, reduction and control. Which measures are required, is not determined by the PPP. In the long history of the PPP, there have always been attempts to revalue the PPP to a material principle that determines the contents of environmental policy on the basis of the internalisation concept. However, this would render the role of the other principles of environmental policy meaningless even though they are more refined than the PPP.

V. Contents and limits 1. Generalities 26

The recognition of the PPP as such only delineates the contours of the principle including its functions. It does not yet determine its exact content. It is generally admitted that the legislature possesses a wide margin of discretion to determine the contents of the PPP with respect to the protected asset (scope of application), the notion of polluter (originator), causation and accountability, the measure, calculation and allocation of relevant costs, the selection of instruments and the delimitation from competing redistribution principles such as the common burden principle.49 This also means that the guidance the PPP may provide is limited. The PPP is mandatory only in its core contents as a prohibition of environmental subsidies and requirement of a basic environmental liability regime. Beyond this hard core, it has legitimizing, directive and interpretative functions. Especially the European Court of Justice has explicitly confirmed that the member states have a wide, even though not unlimited, discretion for implementing the PPP.50 Likewise, principle 16 of the Rio Declaration grants states much latitude in determining the contents and limits of the PPP. The relative indeterminacy and lack of legal certainty of the PPP has been criticised in legal literature51 but is a necessary consequence of its formulation as a principle.

2. Protected assets 27

As its common denomination suggests, the PPP addresses pollution. It is unclear whether climate damage is encompassed since most GHGs do not have hazardous properties but are only liable to cause climate damage through their quantity and accumulation in the atmosphere. Moreover, the PPP seems to exclude the degradation of natural resources through activities other than pollution. However, the narrow wording of the PPP is only due to its historic origin and the environmental problems 48 Annex VI on Liability Arising out of Environmental Emergencies to the Protocol on Environmental Protection to the Arctic Treaty, Art. 5, 45 ILM 5 (2006); also Nagoya Kuala Lumpur Supplementary Protocol on Liability and Redress to the Cartagena Protocol on Biodiversity, Art. 5, UNTC Ch. XXVII No. 8c; see Orlando, p. 283‐84. 49 Epiney, p. 166‐67; Beyerlin/Marauhn, p. 59; Dupuy/Viñuales, p. 82‐83. 50 ECJ Cases C-379 and 380/08 ERG/ENI ECLI:EU:C:2010:127, mns. 59‐60, 79, 86; ERG (fn. 22), mns. 55‐59, 64; Futura (fn. 46), mns. 48, 51‐57. 51 Proelss, p. 90; but see de Sadeleer, Principles p. 33, 60; id., Pro Natura p. 418‐19.

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that were on the agenda of environmental policy at the time when the basic concepts of the PPP were developed. There are no cogent arguments that militate against a dynamic interpretation whereby the PPP covers any activity that contributes to the deterioration of the environment.52 Even the ‘user pays’ principle that concerns potentially harmful use of natural resources can be understood as a variant of the PPP.53 Climate damage can already be denoted as a special form of pollution through quantitative impact. Even though this is not true for environmental degradation, what ultimately counts is not the mode of action but the effect on the environment. In this vein, some national laws explicitly include environmental degradation in the scope of application of the PPP,54 whereas, as far as can be seen, climate damage is not expressly covered anywhere. As regards treaty law that recognizes or incorporates the PPP, climate damage is 28 normally not directly encompassed. In particular, conventions that address certain kinds of pollution or accidents cannot normally be interpreted so as to comprise the emission of GHGs. However, there are exceptions. When a rise of the sea level, extreme weather conditions, floods or landslides associated with global warming cause environmental degradation or accidents that are encompassed by a particular convention, climate damage may fall under the convention. An indispensable condition is that a concrete causal link between the emission of GHGs, global warming and such occurrences can be established in a form that satisfies the requirements of the convention, for instance even by virtue of the precautionary principle. In the field of environmental liability, stricter causal requirements apply. A clear case of coverage of climate damage are agreements that aim at the conservation of nature and apply to all forms of environmental degradation.55 The same is true for conventions with a spatial protective approach such as the Alps Convention56 and the Carpathians Convention57. The objective of these conventions to promote sustainable development also encompasses the prevention, reduction or remediation of climate damage and adaptation to climate change. This has been clarified by the new Art. 12bis of the Carpathians Convention. Moreover, the extent of protection of the relevant assets may raise doubts. The 29 notions of pollution, environmental degradation and climate damage seem to imply that there is a threshold of insignificance below which environmental regulation under the PPP may not reach.58 In the same direction, one may invoke the constitutional protection of economic interests of potential originators. However, due account must also be taken of the precautionary principle so that, depending on the concrete field of regulation, also potential risks to the environment may be subject to regulation according to the PPP.

3. Identification of the polluter (originator) The determination of the polluter (or originator) who is held responsible raises 30 complex problems.59 It is recognized that the legislature has a wide margin of discretion in the choice of the entity that has to bear the costs of pollution or undertake protective 52

Schwartz, Principles p. 262; id., Research Handbook p. 247 et seq.; de Sadeleer, Principles p. 42. OECD, Recommendation of the Council on the Use of Economic Instruments in Environmental Policy, C (90) 177; Schwartz, Research Handbook p. 248. 54 E.g., Art. 1386‐20 French Code Civil; Sec. 2 [4] [p] of the National Environmental Management Act of South Africa. 55 Example: ASEAN Convention on Conservation of Nature of 1985, Art. 10(d), 15 EPL 64 (1985). 56 Convention on the Protection of the Alps of 1991, 1917 UNTS 135 (1992). 57 See supra (fn. 25). 58 Bugge, Justice, p. 420‐21; contra de Sadeleer, Principles p. 41 (matter of legislative choice). 59 Schwartz, Research Handbook p. 248; Bugge, Law and Economics p. 67 et seq.; de Sadeleer, Principles p. 40 et seq.; id., Pro Natura p. 410‐11, 414 et seq. 53

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measures at its own expense. The selection of the polluters that incur responsibility must in principle be based on the same criteria as are recognized for the selection of instruments of environmental policy in general. Effectiveness, efficiency, contribution to innovation, possibility of identification, administrative feasibility, distributive justice and expectation of voluntary compliance will play a role. The limits of the discretion of the legislature to specify the PPP are set by the requirement of causation.60 31 In case of vertical causal chains each actor in a value and distribution chain is a potential addressee. The operator of a polluting facility, the manufacturer of a product, the transporter, the sender, the generator and possessor of waste and even the consumer are in principle suitable actors to be charged with responsibilities under the PPP. Manufacturers may also be held responsible for environmental damage that occurs at the end of the chain. An example is extended producer responsibility whereby the manufacturers of a product are responsible for waste problems that arise at the end of the chain and which they can avoid or mitigate by proper design of the product or taking back the waste.61 This post-consumption responsibility could also be extended to product-related climate damage. Another example for dealing with vertical causal chains is the responsibility for contaminated sites or waters. The US Comprehensive Environmental Response, Compensation and Liability Act (CERCLA)62 extends responsibility to the waste generator, transporter and operator of a disposal facility. Under EU waste law preceding the Environmental Liability Directive, environmental responsibility could be incurred by a variety of actors such as the holder and previous holder of waste, the waste generator, the seller of products or transported materials and the owner of a carrier.63 By contrast, in the application of the German laws that have transposed the EU Environmental Liability Directive, German administrative courts in principle require direct causation. Indirect originators are only responsible where their action or inaction of necessity leads to environmental damage.64 32 A particular problem of the PPP is the treatment of very small polluters. A general de minimis exception would not be appropriate. Rather, it depends on the context of regulation and liability and the possibility to identify the polluters and their contribution whether and to what extent minimal contribution is included. Thus, it is a matter of course that consumers may be suitable addressees of environmental obligations that relate to their day-to-day activities even though their individual contribution to the environmental problem will normally be very small. They can at least be held responsible for complying with administrative regulation or payment of charges in their capacity as members of a particular target sector of the economy such as buildings and traffic.

4. Causation and accountability 33

As stated, causation is an essential prerequisite of applying the PPP (mns 30‐31). However, states have a wide margin of latitude to determine the requirements of causation in detail, both with respect to substantive prerequisites and proof, and this 60 ECJ, Standley (fn. 46), mns. 51‐52 ; Futura (fn. 46), mns. 44‐46, 48, 52‐55; ERG (fn. 22), mns. 52 et seq.; Commune de Mesquer (fn. 46), mns. 71‐72. The responsibility of the (innocent) landowner cannot be based on the PPP; ECJ, Túrkevej Tejtermelö Kft. (fn. 22), mns. 56 et seq.; Fipa (fn. 22), mns. 59, 63. 61 Schwartz, Research Handbook p. 248. 62 Sec. 106, 107 CERCLA, as amended by the Superfund Amendments and Reauthorization Act (SARA). 63 ECJ, Futura (fn. 46), mns. 44‐46, 48, 52‐55; Case C-104/17 SC Cali Esprou ECLI:EU:C:2018:188, mns. 23, 29‐34; Commune de Mesquer (fn. 46), mns. 77‐78, 82; Van de Walle (fn. 46), mns. 58‐60; less extensive Art. 15 Directive in waste (fn. 7); see de Sadeleer, Pro Natura p. 414 et seq. 64 Administrative Court of Appeal Munich, decision of 15 May 2018, 22 CS 18.566, Neue Zeitschrift für Verwaltungsrecht – Rechtsprechungsreport 2019, 10 mn. 22 with further references.

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determination will be largely context-dependent. Causation deduced from natural science and logics (theory of “equivalence of conditions”) will normally be attenuated by considerations of accountability. Besides direct causation also indirect causation may be relevant. Considerations of accountability, especially in the law of environmental liability, may suggest some restraint in holding indirect originators responsible for environmental damage that arises outside of their control. In environmental regulation or taxation uncertainty about causation is a factor that has to be considered in balancing the interests concerned using the normal criteria for the choice of instruments of environmental policy. Considerations of the kind that underlie the precautionary principle may be relevant in the selection of responsible actors from a group of actors whose causal contribution in unclear but where there are science-based reasons to assume that they did contribute. In the field of environmental liability uncertainty may be tackled by application of the relevant rules on evidence. Here, a variety of solutions are possible, ranging from the requirement of judicial conviction close to certainty, prevailing probability, prima facie probability to a rebuttable presumption of causation.65 Joint causation of environmental damage by numerous actors is quite frequent. None 34 of the originators can escape liability by referring to another originator. A de minimis exception is acceptable in order to avoid an excessive attribution of liability to actors with a minimal, unidentifiable contribution. However, it has been held that a contribution of 0.47 % to the total worldwide emissions of GHG equivalents does not necessarily fall under the de minimis exception as long as the liability only is pro rata.66 As regards the kind of liability, for reasons of distributive justice the basic rule should be partial liability according to the individual share of the actor in the damage and joint and several liability only in case where this share is unidentifiable. The interest in ensuring effectiveness of environmental protection through liability justifies the imposition of the burden of proof for identification on the relevant actors.67 However, especially under administrative liability regimes, there even is a clear preference for joint and several liability in all cases of common causation. When several or even a multitude of polluters may contribute to future environ- 35 mental damage in a way that their individual contribution cannot be identified, a collective variant of the PPP whereby all polluters are responsible for collective risk creation arguably is consistent with the logic of the PPP. This may justify the establishment of funds for remediation and compensation of widespread and diffuse environmental damage that are financed by all (potential) originators on the basis of flat rates. Examples are the existing insurance-like compensation funds for marine pollution damage.68 However, arguably the boundaries of the PPP are crossed when, as in the case of some compensation funds for historic soil and water pollution, present polluters have to pay for past damage they did not contribute to.69

5. Delimitation from the common burden principle The PPP is not absolute. There may be situations where its application is unfair or 36 unjust. This may be due to unreasonable economic or social consequences for industry and consumers. Examples are problems of industry with transition to new requirements 65

See ECJ, decisions cited in fn. 60. Oberlandesgericht Hamm, Decision of 30 November 2017 – I-5 U 15/17, Lliuya vs. RWE, Zeitschrift für Umweltrecht 2018, p. 118. 67 Cf ECJ, Standley (fn. 46), mns. 51‐52. 68 See Sands/Peel, p. 781 et seq., 793; Wolfrum/Langenfeld, Environmental Protection by Means of International Liability Law, 1999, p. 11‐12, 26 et seq., 96; Orlando, p. 277, 286. 69 ECJ, Futura (fn. 46), mns. 44‐46; Frenz (fn. 39), p. 249 et seq. 66

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or discriminatory financial burdens of environmental taxes on poor consumers.70 In such cases the common burden principle may apply. This principle means that the financial burdens of preventing, reducing or controlling pollution, climate damage or other kind of environmental degradation are allocated to the state and in the ultimate result to the taxpayer.71 According to the general opinion the application of the common burden principle must be a limited exception to the PPP. All soft law documents on the PPP share this rule-exception position.72 In the EU, there even is a general prohibition of state aids that is only subject to limited exceptions (Art. 107‐109 TFEU). However, in the practice state aids for industry in the field of environmental protection are more frequent than one would expect against the backdrop of the ruleexception paradigm. They are especially granted for facilitating the adjustment to new requirements, providing an incentive for voluntary measures and supporting small and medium-sized industry.73

VI. Instruments 1. Generalities There is much disagreement as to the question which kind of instruments are mandated by, or at least consistent with, the PPP. The reason is, at least primarily, a different understanding of the PPP itself.74 Adherents of the (modified) internalisation concept tend to consider economic instruments as the only or at least as key instruments of the PPP principle because these instruments are deemed to embody a major degree of redistribution of external environmental costs.75 Examples are in particular charges, taxes and emission trading. However, it is an illusion to assume that economic instruments necessarily lead to a complete or far-going internalisation. Charges and taxes are a global means of reaching a specific environmental target that is not necessarily equivalent to tolerable pollution.76 For instance, in climate policy charges and taxes are advocated for reaching the 2° or 1.5° target of global warming laid down in the Paris Agreement. This target falls short of entailing complete redistribution of external costs. It is more or less a means of crisis management. Similar objections may be raised with respect to emission trading, the alternative instrument of choice discussed in the debate on climate policy. One has to admit that the “right” price of pollution that should be the basis for setting the rate of environmental charges and taxes or should be expressed in the price of initial allocation of allowances to emit GHGs is unknown. 38 Following the instrumental understanding, all instruments that lead to some redistribution of environmental costs to the polluter are consistent with the PPP. This means 37

70

See Bugge, Justice p. 415 et seq., 421‐22. Especially in environmental liability, also the beneficiary pays principle may be applicable whereby for reasons of fair distribution of costs and benefits, the potential victim has to bear the costs of protective measures or part of them; see Bugge, Justice p. 420‐21; id., Law and Economics p. 72‐73; Schwartz, Research Handbook p. 248. 72 See, e.g., OECD, Implementation of the PPP (fn. 3), II.2. 73 See as to the EU: Commission Regulation (EC) No 800/2008 of 6 August 2008 declaring certain categories of aid compatible with the common market in application of Articles 87 and 88 of the Treaty, OJ 2008 L 214/3; Commission, Community guidelines on state aid for environmental protection, OJ 2008 C 82/1. 74 See Schwartz, Principles p. 265 et seq.; id., Research Handbook p. 249 et seq.; de Sadeleer, Principles p. 44 et seq. 75 Schwartz, Principles p. 265‐66, 269. 76 Cf Dupuy/Viñuales, p. 82; Proelss, p. 91 who both suggest that the PPP should not at all be applicable where significant pollution remains. 71

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that besides market-based instruments also instruments of administrative regulation such as prohibitions, permits, ex post interventions and criminal sanctions and moreover liability are consistent with the PPP provided that the complete costs of the requisite measures be borne by the polluter. The extent as to which external environmental costs are internalised depends on the direction and stringency of the relevant environmental policy and is not predetermined by the PPP. However, more complete, that is, far-reaching redistribution of external environmental costs should be recognized as an objective of responsible environmental policy and always considered in devising the relevant instruments.77

2. Liability in particular Depending on the shape of the relevant cause of action, environmental liability may 39 be an important or less important instrument of the PPP. It often exercises a supplementary function in relation to administrative regulation and even economic instruments and may fill at least part of the “internalisation gap” left by these instruments. Liability for environmental harm exists to a confusing extent of variation. In particular, the grounds of liability may be objective causation (strict liability), objective causation mitigated by a permit defence or fault (including negligence). Liability may be general or special for environmental and related personal damage. Pure ecologic damage to unowned natural assets that cannot be restored, replaced or substituted does not normally give rise to monetary compensation.78 In an extended form, liability also includes liability of several (potential) polluters through insurancelike compensation funds. Under a historical perspective, traditional liability for tort or nuisance and in 40 particular fault-based liability as applicable to environmental damage cannot be deemed to be an expression of the PPP. However, this does not rule out that, against the backdrop of modern developments, one can read the PPP into traditional causes of action, at least in the sense that they objectively serve as an instrument of the PPP. This includes fault-based liability.79 The contrary view neglects that even strict liability is not equivalent to complete internalisation. Moreover, Art. 3 [1] [b] ELD supplements strict environmental liability for listed activities by a general fault-based liability for biodiversity damage. By virtue of an explicit reference to the PPP, it classifies fault-based liability as an expression of the PPP.80 What one can concede, though, is that strict liability provides a more effective protection of the environment and a higher degree of redistribution and should therefore be given preference.81 Although there are not normally any special liability rules on climate damage, 41 “general” environmental liability may be an instrument for dealing with it. This is clear where the relevant cause of action covers environmental damage in general. Where the environmental assets protected are enumerated in definite terms, climate damage may or may not fall under one or several of these assets. For example, the EU Environmental Liability Directive is limited to biodiversity, water and soil damage. Climate damage may be covered where it can be proved that concrete damage to these protected assets is an indirect consequence of global warming as caused by GHG emissions.82 As a fallback position, one can always take recourse to the protection of human life, health and 77

de Sadeleer, Principles p. 51‐52; Bugge, Justice p. 427. Limited exceptions: Sec. 2706 [d] OPA; Sec. 107 [f] CERCLA. 79 de Sadeleer, Principles p. 49‐50 ; contra: Schwartz, Principles p. 267. 80 To this extent also ECJ, Túrkevej Tejtermelö Kft. (fn. 22), mns. 49‐50. 81 de Sadeleer, Principles p. 51; Lugano Convention (fn. 37), Preamble. 82 To this extent regarding air pollution: ECJ, Túrkevej Tejtermelö Kft. (fn. 22), mns. 39 et seq. 78

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42

43

44

45

property in land on the basis of traditional causes of action like tort and nuisance. International liability agreements do not either directly apply to climate damage but may be applicable when environmental degradation or accidents encompassed by a particular convention are an indirect consequence of GHG emissions (see mn. 28). However, given the present state of climate science, the proof of causation between an activity leading to climate change and a concrete damage will pose considerable and sometimes even unsurmountable problems. Moreover, practical limits to an extensive interpretation of the relevant causes of action may result from the usual exception clauses whereby damage caused by “a natural phenomenon of an exceptional, inevitable and irresistible character” does not give rise to liability.83 Environmental liability mostly arises under private law and thereby shares the shortcomings of private law, especially the dependence on the willingness and ability of the victims to go to court, the normal or at least primary concern with individual victims, the problems of the requisite proof of causation and the cost risk. However, private-law causes of action may also include entitlements of the state in its capacity as “trustee” for unowned natural resources. Thereby they confer to the state claims for compensation of expenses it has incurred for restoration, replacement and substitution of ecological damage. This is a first, but important step of recognizing ecological damage in its own right. Some national laws and many liability conventions including those that expressly refer to the PPP proceed in this manner. More recently, administrative liability for historic or present environmental damage has been on the ascendency, both in national and supranational law and under more recent international liability agreements.84 In administrative liability systems, the competent authorities play a major role. They may order the polluters to implement their obligation to prevent imminent damage and remediate existing damage, but in case of non-compliance or for reasons of administrative expediency the authorities may – and normally will – assume the task of carrying out remediation in lieu of the polluters. Then the costs of the relevant measures have to be borne by the polluters. The choice of administrative environmental liability is primarily motivated by the complexity of the environmental or health problem. The determination of the kind and degree of pollution, the choice of the actors to be held responsible, difficulties in determining causation and the complexity of clean-up, restoration, replacement or substitution speak for an administrative problem management. Moreover, the public interest in effective remediation of contaminated sites or compensation of numerous victims justifies administrative liability.

VII. Conclusion 46

The PPP is widely recognized at national, supranational and international levels as a political and even legal principle for allocating the costs of environmental protection, according to a minority position also as a principle of material responsibility for environmental harm. However, the guidance the PPP may provide for dealing with climate damage is limited. There is no uniform understanding of the legal effects and contents of the PPP. It is mandatory only in its core content as an obligation of the originator to bear the costs of measures for the prevention, reduction and control of pollution or environmental degradation ordered by the state (practically: a mere 83

See, e.g., Art. 4 [1] [b] ELD; Kiev Industrial Accidents Protocol, Art. 4[2] [a], supra fn. 37. See Orlando, p. 280 et seq., 283 et seq.; in addition see the Japanese Pollution-Related Health Compensation Law (Law No. 111/1973). 84

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prohibition of environmental subsidies). In addition, there may be a requirement of a basic environmental liability regime. Beyond this hard core, the legislature possesses a wide margin of political discretion for implementing the PPP. To this extent, the PPP only has legitimizing, directive and interpretative functions. Despite these limitations, the value of the PPP for addressing climate damage lies in the option to posit, for instance by way of an interpretation of existing law in conformity with the PPP, that external environmental costs should be allocated to the polluter as fully as feasible and/ or reasonable. As regards the international level, a strengthening of the PPP element inherent in the principle of common but differentiated responsibilities would be a promising way forward. Liability for climate damage is an instrument of the PPP. Weaknesses of such liability 47 under existing law lie in the fact that there are no specific causes of action and coverage of climate damage is a matter of interpretation. Moreover, in climate damage litigation the requisite proof of causation will pose enormous, often unsurmountable difficulties. It must also be considered that liability has its limits in situations of global-scale harm such as climate damage caused by a huge plurality of actors with often tiny causal contributions.85 Collective forms of financing and coordinated action of the international community for reversing negative trends and undertaking effective restoration of damaged natural resources may be a better response to the existing challenges. 85

Orlando, p. 285‐86; see also Gaines, 26 Tex. Int. L. J. 463 (487, 494) (1991).

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Part 1. Fundamental questions Frank, The International Law Association’s Legal Principles on Climate Change and Climate Liability under Public International Law, 4 Climate Law 201 (2014); Setzer/Nachmany, National Governance, in: Jordan/ Huitema/van Asselt/Forster (eds.), Governing Climate Change, Cambridge University Press 2018, p. 47; Spijkers, The Urgenda case: A Successful Example of Public Interest Litigation for the Protection of the Environment? in: Voigt/Makuch (eds.), Courts and the Environment, Edward Elgar Publishing 2018, p. 305; Stephens, Environmental principles and the International Court of Justice, in: Krämer/Orlando (eds.), Principles of Environmental Law, Elgar Encyclopedia of Environmental Law Vol. VI, Edward Elgar Publishing 2018, p. 557; Strauss, Climate Change Litigation: Opening the Door to the International Court of Justice, in: Burns/Osofsky (eds.), Adjudicating Climate Change, Cambridge University Press 2009, p. 334; Sunstein, Of Montreal and Kyoto: A Tale of Two Protocols, 31 Harv. Envtl. L. Rev. 1 (2007); Tava, The Role of NonGovernmental Organisations, Peoples And Courts In Implementing International Environmental Laws, in: Alam/Bhuiyan/Chowdhury/Techera (eds.), Routledge Handbook of International Environmental Law, Routledge 2013, p. 123; Verheyen/Zengerling, International Dispute Settlement, in: Carlarne/Gray/Tarasofsky (eds.), The Oxford Handbook of International Climate Change Law, Oxford University Press 2016, p. 417; Viñuales, The Contribution of the International Court of Justice to the Development of International Environmental Law: A Contemporary Assessment, 32 Fordham Int’l L.J. 232 (2008); Voigt, Introduction. International Courts and the Environment: The Quest for Legitimacy, in: Voigt (ed.), International Judicial Practice on the Environment, Cambridge University Press 2019, p. 1; Voland, Zur Reichweite von Menschenrechten im Klimaschutz, NVwZ 114 (2019); Wegener, Urgenda – Weltrettung per Gerichtsbeschluss? ZUR 3 (2019); Winkler/Zeccola/Willing, Die Folgen eines legislativen und exekutiven Vakuums am Beispiel der Fahrverbots-Rechtsprechung, DVBl. 76 (2019); Winter, Armando Carvalho et alii versus Europäische Union: Rechtsdogmatische und staatstheoretische Probleme einer Klimaklage vor dem Europäischen Gericht, ZUR 259 (2019); Winter, The Paris Agreement: New Legal Avenues to Support a Transboundary Harm Claim on the Basis of Climate Change, in: Voigt (ed.), International Judicial Practice on the Environment, Cambridge University Press 2019, p. 188; Zahar, International Climate Change Law and State Compliance, Routledge 2015; Zahar, The Climate Change Regime, in: Alam/Bhuiyan/Chowdhury/ Techera (eds.), Routledge Handbook of International Environmental Law, Routledge 2013, p. 349.

Contents I. Introduction: the judicialization of climate change governance .......... II. Analysis: structures of judicial involvement in climate protection ..... 1. Venues........................................................................................................... 2. Protagonists.................................................................................................. 3. Goals .............................................................................................................. a) Mitigation governance ......................................................................... b) Mitigation regulation............................................................................ c) Mitigation of specific emissions......................................................... d) Adaptation .............................................................................................. e) Compensation ........................................................................................ f) Auxiliary litigation ................................................................................ III. Contextualization: factors influencing the role of courts ...................... 1. Procedural rules and the competences of courts ................................ 2. Substantive law and the legal order in general.................................... 3. Political and social environment............................................................. IV. Evaluation: the legitimate functions of courts in climate protection.. 1. Climate change litigation between law and politics ........................... 2. The suitability of judicial engagement with climate change............. 3. The effectiveness of climate change litigation...................................... V. Conclusion: potential and limitations of judicial climate protection..

1 4 5 8 10 11 12 13 14 15 16 17 18 21 25 27 28 32 34 36

I. Introduction: the judicialization of climate change governance 1

“Climate Change is a defining challenge of our time and has led to dramatic alterations in our planet’s climate system. For Pakistan, these climatic variations have primarily resulted in heavy floods and droughts, raising serious concerns regarding water and food security. On a legal and constitutional plane this is clarion call for the protection of fundamental rights of the citizens of Pakistan, in particular, the vulnerable 64

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and weak segments of the society (…)”. These words do not stem from a political speech, a journalistic comment or a parliamentary discussion. They are part of the reasoning of the Lahore High Court in the Leghari decision issued in 2015. In this case the Pakistani Court held that the “delay and lethargy” of the government to implement its national climate change policy amounted to a violation of the constitutionally guaranteed right to life.1 The Court went on to order specific and far-reaching measures, including the establishment of a Climate Change Commission to facilitate the implementation of Pakistan’s climate change policy framework.2 The Leghari decision constitutes but one of numerous proceedings in which courts 2 around the world addressed the issue of climate change over the last years. Among the landmark cases is the 2007 decision of Massachusetts v. EPA, in which the U.S. Supreme Court held that the Environmental Protection Agency had the authority to regulate greenhouse gases under the U.S. Clean Air Act.3 In 2008, an attempt by the NGO Friends of the Earth to compel the Canadian government to comply with its greenhouse gas reduction goals under the Kyoto Protocol failed.4 In 2015, the Hague District Court held in the Urgenda case that the government’s emission reduction targets were insufficient and violated the duty of care under Dutch law and therefore ordered the Dutch government to take action in order to ensure that emissions in the year 2020 will be at least 25 % lower than those in 1990.5 Other spectacular cases are pending, such as the case of Juliana v. United States, brought in the District Court of Oregon by a number of young plaintiffs claiming a violation of their fundamental rights due to the failure of the government to adequately regulate greenhouse gas emissions. The Court denied a motion to dismiss, thereby letting the case move forward.6 In Germany, the Peruvian farmer Saul Luciano Lliuya brought suit in civil court against the electricity producer RWE for the company’s contribution to climate change.7 A complaint brought by an alliance of NGOs and individuals arguing that Germany’s insufficient climate change policy is unconstitutional is pending before the Constitutional Court.8 Within the European Union, plaintiffs brought suit against the EU legislature in the Carvalho case arguing that the measures taken by the EU to mitigate greenhouse gas emissions are insufficient and violate fundamental rights.9 In 2019, the General Court deemed the

1 Lahore High Court, Order of 4 September 2015, W.P. No. 25501/2015, Ashgar Leghari v. Federation of Pakistan. 2 See also Lahore High Court, Order of 14 September 2015, W.P. No. 25501/2015, Ashgar Leghari v. Federation of Pakistan; Lahore High Court, Judgement of 25 January 2018, W.P. No. 25501/2015, Ashgar Leghari v. Federation of Pakistan. 3 U.S. Supreme Court, Massachusetts v. EPA, 549 U.S. 497 (2007). 4 Federal Court, Friends of the Earth v. Canada, 2008 FC 1183 [2009] 3 F.C.R. 201. The decision was upheld in Federal Court of Appeal, Friends of the Earth v. Canada (Environment), 2009 FCA 297 (CanLII). An application for leave to appeal was dismissed by the Supreme Court, Friends of the Earth – Les Ami(e)s de la Terre v. Minister of the Environment and Governor in Council, 2010 CanLII 14720 (SCC). 5 District Court of the Hague, Judgment of 24 June 2015, C/09/456689/HA ZA 13‐1396, Urgenda Foundation v. the State of the Netherlands (Ministry of infrastructure and the environment); upheld by Court of Appeal of the Hague, Judgment of 9 October 2018, C/09/456689/HA ZA 13‐1396, Urgenda Foundation v. the State of the Netherlands (Ministry of infrastructure and the environment) “and Supreme Court of the Netherlands, Judgment of 20 December 2020, 19/00135, The State of the Netherlands v. Urgenda Foundation.” 6 U.S. District Court for the District of Oregon Eugene Division, Juliana et al. v. United States of America et al., Order of 10 November 2016, 217 F.Supp. 3d 1224 (D. Ore. 2016). 7 The Regional Court Essen dismissed the case in 2016 (Judgment of 15 December 2016, 2 O 285/15), the appeal is still pending before the Higher Regional Court Hamm (5U 15/17). 8 See Kahl/Daebel, EEELR 2019, 67. 9 See Savaresi/Auz, Climate Law 9 (2019), 244 (256‐258); Winter, ZUR 2019, 259.

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case to be inadmissible.10 An appeal is pending before the European Court of Justice. Looking again beyond the Western world, the Supreme Court of Colombia issued a landmark judgment in 2018, ruling that the Colombian authorities had failed to protect the Amazon region from deforestation, in a decision based not only on considerations regarding international law and fundamental rights but also the rights of future generations.11 3 These cases, which are preceded and accompanied by countless other attempts to bring climate change before the courts, show that climate change is increasingly an issue dealt with in judicial proceedings. With the rising awareness for the devastating consequences of climate change, caused to a significant degree by man-made greenhouse gas emissions, for the urgency of effective climate protection measures and with the increase of strategic litigation brought by environmental NGOs, it does not seem far-fetched to suspect that we have only witnessed the timid beginnings of climate change litigation on a global scale. Against this background, the question of the appropriate role of courts within the multilevel polycentric network of climate protection arises.12 While some view courts as effective and legitimate instruments contributing to the protection of the global climate others, criticize the focus on judicial solutions, deeming courts to be unsuitable and not legitimized to combat climate change. While, of course, every case is different and climate change litigation takes place within different legal systems and settings, the question of the appropriate role of courts in climate protection can nonetheless be addressed in a conceptual manner, taking into account the practice of courts as well as the general position of courts within a constitutional order. I will proceed by addressing three consecutive questions: What role do courts play in climate protection and what role could they play (II.)? What are the factors within and outside of the legal system that influence the role of courts in this regard (III.)? And how is the role of courts in climate protection to be evaluated, in particular in light of the separation of powers (IV.)?

II. Analysis: structures of judicial involvement in climate protection 4

Climate change litigation can take place and has already taken place before different international, regional and domestic courts (1.), involve different parties and other actors (2.) and pursue different goals (3.).

1. Venues 5

While questions of international environmental law in general have increasingly been brought before courts on the global level, cases directly addressing climate change have until now not been dealt with by international courts.13 The International Court of Justice, for example, has not dealt with climate change directly, but has contributed to 10

ECJ, Case T-330/18, Order of 8 May 2019, Carvalho et al. v. European Parliament and Council. Supreme Court of Colombia, Judgment of 5 April 2018, Case No. STC4360‐2018; see Acosta Alvarado/Rivas-Ramírez, J. Envtl. L. 30 (2018), 519. 12 The focus is accordingly on proactive climate litigation aimed at advancing climate protection goals, not on reactive litigation aimed at opposing such change. On this differentiation see Savaresi/Auz, supra (fn. 9), 246; for a more complex typology Ghaleigh, Climate Law 1 (2010), 31; for an empirical analysis Markell/Ruhl, Fla. L. Rev. 64 (2012), 15. 13 Verheyen/Zengerling, in: Carlarne/Gray/Tarasofsky (eds.), The Oxford Handbook of International Climate Change Law, 2016, 417 (421); Sands, J. Envtl. L. 28 (2016), 19 (23). 11

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the development of international environmental law in other ways:14 It has recognized an obligation of states to ensure that activities within their jurisdiction and control respect the environment of other states or of areas beyond national control,15 accepted that concerns for the environment can constitute essential interests under the defence of necessity,16 and recognized the requirement to undertake an environmental impact assessment in case of significant transboundary risk to the environment.17 In 2018, the Court also ruled for the first time on a claim for compensation between states for environmental harm.18 While the Court has overall been rather timid in dealing with environmental questions,19 it has the potential to address some of the more pertinent international legal issues surrounding climate change either through a contentious case brought by a state against another state or through an advisory opinion upon a request by the General Assembly, the Security Council or other UN institutions authorized by the General Assembly.20 Due to its general jurisdiction, the ICJ can potentially adjudicate any question involving the international legal rules on climate protection and substantiate the obligations of states, determine the rules of responsibility for climate change or hold individual states or groups of states accountable for impairments of the climate.21 Deliberations in this direction have already been undertaken, with Tuvalu in 2002 considering to bring a claim against the United States and Australia22 and Palau unsuccessfully petitioning the UN General Assembly in 2011 to request an advisory opinion of the ICJ regarding the responsibility of states to prevent damage caused by climate change.23 Similarly, the International Tribunal for the Law of the Sea could, within its more limited jurisdiction ratione materiae, adjudicate climate change cases either through contentious litigation between the parties to the UN Convention on the Law of the Sea or through an advisory opinion.24 Other possible international dispute-settlement venues for climate change litigation include the dispute-settlement mechanism established within the WTO.25 And while there have been instances of international arbitration in front of ICSID tribunals as well as the Permanent Court of 14 See Fitzmaurice, in: Tams/Sloan (eds.), The Development of International Law by the International Court of Justice, 2013, 353; Stephens, in: Krämer/Orlando (eds.), Principles of Environmental Law, 2018, p. 557; Viñuales, Fordham Int’l L.J. 32 (2008), 232. In 1993, the ICJ established a Special Chamber for Environmental Matters under Art. 26 (1) ICJ Statute but chose not to reconstitute it in 2006 since parties did not exercise the option to have their case decided by the chamber. 15 ICJ, Legality of the Threat or Use of Nuclear Weapons, Advisory Opinion, ICJ Reports 1996, 226 (241‐242). 16 ICJ, Gabčikovo-Nagymaros Project (Hungary/Slovakia), Judgment, ICJ Reports 1997, 7 (41). 17 ICJ, Pulp Mills on the River Uruguay (Argentina v. Uruguay), Judgment, ICJ Reports 2010, 14 (82‐ 83); ICJ, Certain Activities Carried Out by Nicaragua in the Border Area (Costa Rica v. Nicaragua) and Construction of a Road in Costa Rica along the San Juan River (Nicaragua v. Costa Rica), Judgment, ICJ Reports 2015, 665 (706‐707). 18 ICJ, Certain Activities Carried Out by Nicaragua in the Border Area (Costa Rica v. Nicaragua), Compensation owed by the Republic of Nicaragua to the Republic of Costa Rica, Judgment of 2 February 2018. 19 See Stephens, supra (fn. 14), 557; Fitzmaurice, supra (fn. 14), 353. 20 See Strauss, in: Burns/Osofsky (eds.), Adjudicating Climate Change, 2009, 334 (338‐350). 21 On possible contributions of the ICJ Sands, supra (fn. 13), 19; Strauss, supra (fn. 20), 350‐356; Korman/Barcia, Yale J. Int’l L. Online 37 (2012), 35; Winter, in: Voigt (ed.), International Judicial Practice on the Environment, 2019, 188. 22 See Jacobs, Pac. Rim L. & Pol’y J. 14 (2005), 103; Chang, in: Yeh (ed.), Climate Change Liability and Beyond, 2017, 139 (150‐152). 23 See Korman/Barcia, supra (fn. 21), 35. 24 See Sands, supra (fn. 13), 27‐34; Verheyen/Zengerling, supra (fn. 13), 429‐433; on the environmental jurisprudence of the ITLOS Proelss, in: Krämer/Orlando (eds.), Principles of Environmental Law, 2018, p. 568. 25 Verheyen/Zengerling, supra (fn. 13), 435‐437.

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Arbitration in which corporations challenged regulatory climate protection measures,26 an ICSID tribunal in 2017 ordered a mining company to pay compensation for environmental damages to Ecuador.27 6 At the regional level, human rights courts have also begun to address climate change.28 Within the Inter-American system of human rights protection, the Inter-American Commission on Human Rights, however, refused to hear a petition filed in 2005 on behalf of the Inuit against the climate policy of the United States and Canada.29 The Commission as well as the Inter-American Court of Human Rights have, however, found human rights violations in more narrowly framed cases, for example in the Mayagna case of 2001, in which an indigenous group claimed that Nicaragua had not fulfilled its duty to protect against environmental harm caused by private corporations.30 In a landmark advisory opinion of 2017, the Court moreover highlighted the connection between the protection of the environment and human rights, recognized the human right to a healthy environment and elaborated on the obligations of states to prevent environmental damages within and outside of their territory.31 The African Commission on Human and Peoples’ Rights also found in the Ogoniland decision of 2001 that the Nigerian government’s involvement in oil production at the expense of the environment amounted to a violation of the right to health and the right to a “African Court on Human and Peoples’ Rights”.32 In the Ogiek case of 2017 the African Court of Human and Peoples’ Rights rejected broad claims of the government that the impairment of human rights of indigenous people was necessary for environmental reasons and highlighted that impediments to the environment can violate human rights.33 The European Court of Human Rights has until now not ruled directly on climate change issues but has nonetheless developed an extensive body of jurisprudence dealing with the implications of environmental damages for human rights.34 Moving beyond the context of human rights, the role of the Court of Justice of the European Union is closely linked to the specific content of EU environmental law, which the Court has dealt with in hundreds of cases.35 The overall approach of the Court has been characterized as generally favourable to environmental protection while at the same time balancing diverging economic and environmental interests.36 The Carvalho case provides the Court of Justice with the opportunity to address climate change in a more comprehensive manner. 26

See Verheyen/Zengerling, supra (fn. 13), 421‐423. ICSID, Burlington Ressources Inc. v. Republic of Ecuador, ICSID Case No. ARB/08/5, Decision on Counterclaims of 7 February 2017; see da Silva, N.Y.U. J. Int’l L. & Pol. 50 (2018), 1417. 28 See Verheyen/Zengerling, supra (fn. 13), 423‐424, 433‐435; on the “human rights turn” in climate change law, see Peel/Osofsky, TEL 7 (2018), 37; Savaresi/Auz, supra (fn. 9), 244. 29 See Meltz, in: Masson (ed.), Climate Change Litigation and Law, 2010, 1 (32‐33); Abate, Stan. Envtl. L.J. 26A (2007), 3 (29‐49); Osofsky, Am. Indian L. Rev. 31 (2007), 675. 30 Inter-American Court of Human Rights, Case of the Mayagna (Sumo) Awas Tingni Community v. Nicaragua, Judgment of 31 August 2001. 31 Inter-American Court of Human Rights, Environment and Human Rights, Advisory Opinion OC-23/ 17 of 15 November 2017, requested by the Republic of Colombia, see Markus/Silva-Sanchez, ZUR 2019, 150. 32 African Commission on Human and Peoples’ Rights, The Social and Economic Rights Action Center and the Center for Economic and Social Rights v. Nigeria, Communication 155/96, decision taken at 30th Ordinary Session, Banjul, The Gambia, from 13 to 27 October 2001, ACHPR/COMM/A044/1659. 33 African Court on Human and Peoples’ Rights, Judgment of 26 May 2017, Application No. 006/2012, African Commission on Human and Peoples’ Rights v. Kenya; see Chenwi, in: Knox/Pejan (eds.), The Human Right to a Healthy Environment, 2018, 59 (77‐83). 34 See Pedersen, Geo. Int’l Envtl. L. Rev. 21 (2008), 73; Pedersen, in: Knox/Pejan (eds.), The Human Right to a Healthy Environment, 2018, 86. 35 Bogojević, Law & Policy 35 (2013), 184. 36 See Krämer, in: Voigt (ed.), International Judicial Practice on the Environment, 2019, 25 (46). 27

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Most judicial decisions dealing with climate change, including the most ambitious 7 decisions, have, however, been issued by domestic courts. Constitutional courts and high courts, courts of general jurisdiction and increasingly also specialized environmental courts37 have dealt with different aspects of climate change, with U.S. and Australian courts as forerunners,38 at least quantitatively speaking and regarding cases more or less directly dealing with climate change and its implications. Within Europe, the Aarhus Convention has enhanced the possibilities for courts to deal with environmental and also climate change related issues. While, of course, every domestic court can only adjudicate cases within its jurisdiction and within the legal parameters of its domestic legal system, decisions of domestic courts are being treated as general landmark judgments with implications not only for the jurisdiction in which they were issued but globally. They are seen as a possible inspiration for other domestic courts to draw upon, but also as pioneers paving the path for international courts to follow.39

2. Protagonists Climate change related claims can be brought by different plaintiffs against different 8 defendants. Individuals and other private actors can bring suit against the state or governmental actors for noncompliance with the state’s obligations as, for example, in the cases of Leghari, Urgenda and Juliana, or against the European Union in the Carvalho case. Private actors can sue other private actors for violating climate protection obligations or for their general contribution to climate change as in the Lliuya case against RWE. Under specific circumstances public actors can also sue private companies: In 2008, the Alaskan city of Kivalina brought, ultimately without success, suit against the Exxon Mobil Corporation arguing that Exxon was responsible for the destruction of the village through flooding caused by climate change.40 Finally, state actors can sue other state actors in connection with climate protection measures, as in the case of Massachusetts v. EPA.41 This case also shows the possibility of combinations between vertical and horizontal claims, since the proceedings against the agency were initiated by different states, local governments as well as private organizations. Climate change litigation is, however, not limited to the parties of the proceedings. 9 Collective actors such as NGOs may, depending on the particular procedural rules applicable, have standing in front of the court or may play a role in the background of the judicial proceedings, funding, supporting or steering an individual who has standing or submit amicus curiae briefs.42 Who can bring a case against whom is, of course, regulated by the procedural rules of the specific courts as well as determined by the rights and obligations established under the applicable law, so that the possible range of protagonists of climate change litigation is defined by procedural as well as substantive law. 37 Pring/Pring, in: Paddock/Glicksman/Bryner (eds.), Decision Making in Environmental Law, 2016, 452; Preston, J. Envtl. L. 26 (2014), 365; Guidone/Jonas, in: Voigt/Makuch (eds.), Courts and the Environment, 2018, 369. 38 Peel/Osofsky, Climate Change Litigation, 2015; Osofsky/Peel, in: Voigt (ed.), International Judicial Practice on the Environment, 2019, 311. 39 Voigt, in: Voigt (ed.), International Judicial Practice on the Environment, 2019, 1 (11); Roy/Woerdman, J. En. & Nat. Res. L. 34 (2016), 165 (166‐167). 40 U.S. District Court for the Northern District of California, Native Village of Kivalina v. ExxonMobil Corp., 663 F. Supp. 2d 863, 883 (N.D. Cal. 2009); upheld by U.S. Court of Appeals for the Ninth Circuit, Native Village of Kivalina v. ExxonMobil Corp., 696 F.3d 849 (9th Cir. 2012); on the role of cities in climate change governance in general Aust, RECIEL 28 (2019), 57. 41 Osofsky, in: Farber/Peeters (ed.), Climate Change Law, Vol. I, 2016, 325 (331‐332). 42 Tava, in: Alam/Bhuiyan/Chowdhury/Techera (eds.), Routledge Handbook of International Environmental Law, 2013, 123.

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3. Goals 10

Strongly linked to the question of the participants are the different goals pursued with climate change litigation.43 While within climate change law a major differentiation is drawn between mitigation and adaptation,44 further differentiation can be made in the context of litigation goals, in particular with regard to mitigation. Compensation claims for damages that have already occurred do not fit neatly within this differentiation and have to be regarded as a separate class of litigation. And finally, cases dealing more indirectly with climate change also have to be taken into account.45

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a) Mitigation governance. Firstly, climate change litigation can aim at compelling public authorities to take more effective measures to reduce emissions. Such claims will regularly not target specific measures of the state but rather, as for example in the Urgenda, Leghari and Friends of the Earth cases or in the Juliana proceedings, argue that the actions taken by the public authority are in general insufficient. The specific claim and its prospects for success will depend highly on the applicable law: When climate emission goals have been firmly established, as for example under the top-down approach of the Kyoto Protocol,46 litigants might be able to argue that the legally binding goals have not been fulfilled, as attempted, ultimately unsuccessfully, in the Friends of the Earth litigation. Under the bottom-up approach of the Paris Agreement claimants can argue that a state is not fulfilling its mainly procedural obligations with regard to the nationally determined contributions to emission mitigation.47 Within the European Union, judicial review brought either directly under the infringement proceedings or indirectly through the preliminary reference procedure can aim at compliance by states with their obligations to reduce emissions, to comply with climate protection standards or to incorporate other climate-related measures.48 Domestic courts also play an important role in scrutinizing whether states comply with pollution targets of EU directives, as, for example, in the ClientEarth case in front of U.K. courts, with the Administrative Court in 2018 declaring the Air Quality Plan of the government to be unlawful.49 Apart from specific legal rules dealing with reduction targets, courts have resorted to general principles and legal rules, in particular human and fundamental rights, as a basis for obligations of states to combat climate change.

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b) Mitigation regulation. Secondly, and with fluent transition from the first group of cases, claims can be directed not at measures to reduce greenhouse gas emissions but rather aim to compel administrative agencies to take into consideration or attribute higher weight to climate change concerns. In this vein, the U.S. Supreme Court in Massachusetts v. EPA held that the EPA, under the Clean Air Act, had the authority to 43 See Bodansky/Brunnée/Rajamani, International Climate Change Law, 2017, 285‐287; Hsu, U. Colo. L. Rev. 79 (2008), 101 (111‐115). 44 Carlarne/Gray/Tarasofsky, in: Carlarne/Gray/Tarasofsky (eds.), The Oxford Handbook of International Climate Change Law, 2016, 3 (16‐20); Bodansky/Brunnée/Rajamani, supra (fn. 43), 11‐14. 45 On the distinction between direct and indirect climate change cases Peel/Osofsky/Foerster, Melb. Univ. Law Rev. 41 (2017), 793 (801‐802). 46 See Freestone, in: Carlarne/Gray/Tarasofsky (eds.), The Oxford Handbook of International Climate Change Law, 2016, 97 (104‐106). 47 See Bodansky/Brunnée/Rajamani, supra (fn. 43), 231‐236; Mayer, TEL 7 (2018), 251; Peel/Osofsky/ Foerster, supra (fn. 45), 808‐811. 48 See Bogojević, in: Carlarne/Gray/Tarasofsky (eds.), The Oxford Handbook of International Climate Change Law, 2016, 670. 49 England and Wales High Court (Administrative Court), ClientEarth (No. 3) v. Secretary of State for the Environment, Food and Rural Affairs, Secretary of State for Transport and Welsh Ministers [2018] EWHC 315 (Admin).

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regulate greenhouse gas emissions and that the reasons given by the agency not to do so were unlawful. In Germany, proceedings initiated by the consumer protection organization Deutsche Umwelthilfe arguing that the state had to do more against pollution in cities and even consider banning heavily polluting diesel motors led to a number of favourable administrative court decisions, ultimately upheld by the Federal Administrative Court.50 Other court decisions have held that decisions by planning or regulatory agencies insufficiently considered the effects of a project on greenhouse gas emissions.51 c) Mitigation of specific emissions. Thirdly, suits can be initiated directly against the 13 emitting entities, usually private or public held companies as, for example, in the attempt to sue electric power companies in the United States for their greenhouse gas emissions, ultimately quashed by the Supreme Court in 2011.52 While there are established private law principles dealing with harmful emissions under tort, delict or property law,53 claims focusing not on specific harm or violations but rather on greenhouse gas emissions and climate change as such raise particularly challenging questions.54 d) Adaptation. Turning from mitigation to adaptation, claims can fourthly be 14 brought in the context of measures not aiming at reducing greenhouse gas emissions directly but rather addressing the impact of climate change. In this context, litigation can, for example, deal with impact studies and vulnerability assessments or concern the consideration of the impact of climate change on planning decisions.55 e) Compensation. Among the most controversial forms of litigation are claims for 15 compensation for climate change related damages. Such claims can be brought against public as well as private entities emitting greenhouse gases or otherwise negatively affecting the environment. Cases have been brought for environmental damages caused by specific measures.56 They often have a transnational dimension as, for example, the case brought by Ecuadorian individuals and indigenous communities against the Texaco Oil Company which led to judicial proceedings in the United States, Ecuador and Canada as well as arbitral proceedings.57 In international contexts, compensation for transboundary environmental damages has been adjudicated starting with the famous Trail Smelter arbitration58 leading up to the 2018 decision of the ICJ awarding compensation to Costa Rica for environmental damage caused by Nicaragua.59 By contrast, under a more “radical” approach compensation claims are raised for damages based on the argument that a company has contributed to climate change through the emission of greenhouse gases and is therefore responsible and liable for climate change 50 Federal Administrative Court, Judgments of 27 February 2018, BVerwG 7 C 26.16 and BVerwG 7 C 30.17; see Winkler/Zeccola/Willing, DVBl. 2019, 76; Franzius, NuR 2018, 433. 51 See, e.g., Environment Court of New Zealand, Genesis Power Ltd. V. Franklin District Council, Decision No. A 148/2005; High Court of New Zealand, Auckland Registry, Greenpeace New Zealand v. Northland Regional Council and Might River Power Limited, CIV 206‐404‐004617 (2006), New South Wales Land and Environment Court, Gray v. The Minister for Planning and Ors [2006] NSWLEC 720. 52 U.S. Supreme Court, American Electric Power Company v. Connecticut, 564 U.S. 410 (2011). 53 See Howarth, in: Lees/Viñuales (eds.), The Oxford Handbook of Comparative Environmental Law, 2018, 1091 (1098‐1110). 54 Kysar, Envtl. L. 41 (2011), 1 (3‐4). 55 For a comprehensive analysis see Peel/Osofsky, supra (fn. 38), 108‐172. 56 See Grinlinton, in: Fisher (ed.), Research Handbook on Fundamental Concepts of Environmental Law, 2016, 391 (399‐400). 57 See Léon Moreta/Liu, in: Voigt/Makuch (eds.), Courts and the Environment, 2018, 271. 58 PCA, Trail Smelter Case (US v. Canada) (1941) 3 RIAA 1905. 59 ICJ, Costa Rica v. Nicaragua, supra (fn. 18).

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related damages.60 Such compensation claims have been brought before the courts in the United States and Australia,61 and also the German case of Lliuya v. RWE, dealing with a claim regarding compensation for adaptation measures, falls within this category. These cases raise complex questions regarding the standard of liability, causation and responsibility as well as with regard to the burden of proof. Not directly tackling greenhouse gas emissions but closely related to these cases are suits brought against companies for falsely advertising the amount of greenhouse gas emissions affiliated with the production or use of their products.62 16

f) Auxiliary litigation. While those five kinds of claims are at the heart of climate change litigation, there are numerous other constellations in which courts address issues related to climate change, including cases involving access to information or participation rights in environment-related decision-making processes,63 concerning compliance with climate change related reporting or surveillance obligations64 or commitments to support other states,65 as well as cases dealing with the legal framework for climate change related to actions such as compensation claims arising out of NGO protest measures.66

III. Contextualization: factors influencing the role of courts 17

This brief overview already shows the manifold actual and potential dimensions of climate change litigation. A number of factors from within and outside the legal system influence whether and to what extent climate change litigation can occur and can be successful.

1. Procedural rules and the competences of courts 18

Since climate change litigation needs to be initiated by a plaintiff, the question of who has standing plays a vital role. In many international as well as domestic contexts the person or entity wanting to bring a claim needs to show an impact on her individual rights or a legally protected interest.67 In the context of environmental law in general and with regard to climate change in particular such a focus on individual rights and individual concernment will often be an obstacle so that the receptiveness of a legal system for climate change litigation will to a high degree depend upon the way and degree in which it opens itself towards public interest litigation, a question that may depend on legislation as well as doctrines of standing and the way they are employed by courts. These rules change from jurisdiction to jurisdiction and even within federal systems.68 Within international law and in particular within the European Union the Aarhus Convention has provided significant impulses for a more lenient approach to 60 See Grossman, in: Burns/Osofsky (eds.), Adjudicating Climate Change, 2009, 193; Brunnée/Goldberg/ Lord/Rajamani, in: Lord/Goldberg/Rajamani/Brunnée (eds.), Climate Change Liability, 2012, 23 (32‐37). 61 Peel/Osofsky, Minn. L. Rev. 99 (2015), 2177. 62 See Koch/Lührs/Verheyen, in: Lord/Goldberg/Rajamani/Brunnée (eds.), Climate Change Liability, 2012, 376 (415‐416). 63 See Razzaque, in: Alam/Bhuiyan/Chowdhury/Techera (eds.), Routledge Handbook of International Environmental Law, 2013, 137. 64 See Zahar, in: Alam/Bhuiyan/Chowdhury/Techera (eds.), Routledge Handbook of International Environmental Law, 2013, 349 (357‐359); Bodansky/Brunnée/Rajamani, supra (fn. 43), 193‐195 and 242‐244. 65 See Mayer, The International Law on Climate Change, 2018, 200‐208. 66 See Koch/Lührs/Verheyen, supra (fn. 62), 398‐399. 67 See, e.g., U.S. Supreme Court, Lujan v. Defenders of Wildlife, 504 U.S. 555, 560‐561 (1992). 68 See Millner, Deakin LR 16 (2011), 189 (197‐199).

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standing rules, allowing for more public interest litigation at least in some contexts of environmental litigation,69 a potential that has, nonetheless, not yet been fully developed.70 Rules of standing have also been at the centre of important climate change cases such as Massachusetts v. EPA, Urgenda and Carvalho. Through the rules of standing the legislature as well as the courts themselves, which ultimately have the authority to interpret and apply those, rules can govern the extent to which climate change litigation is possible. Consequently, those rules are often at the centre of legal as well as policy debates surrounding climate change law. The same applies to other procedural rules and determinants, with the rules on costs of judicial proceedings as a potentially significant barrier to climate change litigation.71 Deeply connected to the question of standing and other procedural rules are rules 19 regarding the competence of a court to hear and adjudicate a climate change case. With regard to international courts, the restrictive rules of jurisdiction prove to be a decisive barrier to more comprehensive judicial engagement with climate change.72 Within the context of domestic courts, the judicial competence to review measures taken – and, even more controversially, not taken – by the legislature and the executive influences the extent to which a court can advance climate protection goals. Consequently, the political question doctrine, standards of judicial review and implications from the concept of separation of powers are discussed not only in academic debate but also within judicial decisions addressing climate change.73 While all kinds of courts can potentially litigate climate change cases, the establish- 20 ment of special environmental courts or at least specialized chambers within a court of general jurisdiction can enhance the prospects of climate change litigation. Against the background of the ever-increasing complexity of environmental law as well as scientific uncertainties,74 specialized courts develop a particular competence in dealing with climate change cases. They might prove to be more open towards climate change claims and exhibit a structural bias towards this goal as has been shown with other specialized dispute-settlement and supervisory bodies.75 The establishment and strengthening of environmental law within law school curricula may provide further stimulation for an enhanced engagement with climate change. International and regional organizations have also started to get involved in capacity-building measures and in training judges in questions of environmental adjudication.76

2. Substantive law and the legal order in general A decisive factor for the success of climate change litigation is the extent to which 21 substantive legal principles and rules support the claim. Climate Change mitigation claims, for example, might have stronger prospects of success when a state has accepted specific legally binding mitigation obligations under international law or passed legislation encompassing binding mitigation goals. Compensation claims may have better prospects of success when a legal order encompasses specific laws on compensation.77 69

See Mangold, Ind. J. Global Legal Stud. 21 (2014), 223. See Schoukens, in: Voigt (ed.), International Judicial Practice on the Environment, 2019, 74; critical Ruffert, DVBl. 2019, 1033. 71 Peel/Osofsky, supra (fn. 38), 279‐283. 72 Strauss, supra (fn. 20), 338‐348. 73 See Peel/Osofsky, supra (fn. 38), 266‐283; Hsu, supra (fn. 43), 143‐158; Ewing/Kysar, Yale L.J. 121 (2011), 350 (378‐409). 74 On the need for courts to consult scientific experts Roy/Woerdman, supra (fn. 39), 165. 75 See Payandeh, in: Andenas/Bjorge (eds.), A Farewell to Fragmentation, 2015, 297. 76 See Robinson, in: Voigt/Makuch (eds.), Courts and the Environment, 2018, 2 (18‐27). 77 See Kahl/Daebel, supra (fn. 8), 76. 70

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With regard to the applicable law in climate change litigation, three general observations can be made: 22 Firstly, climate change litigation reflects the polycentric nature of climate change governance.78 While international courts and tribunals are generally limited to applying international law,79 domestic courts regularly apply domestic law as well as international law. The Leghari decision referred to international environmental principles and the Urgenda decision is based on international environmental law and the European Convention on Human Rights, which are relied upon to substantiate the duty of care under Dutch law. Claims can also be grounded in laws implementing international legal obligations, as in the Friends of the Earth litigation based on the Canadian legislation implementing the Kyoto Protocol or the Carvalho case dealing with EU legislation incorporating and based on obligations under the Kyoto Protocol and the Paris Agreement. The multilevel interplay of international and domestic law but also regional as well as sub-national law shapes and defines climate change litigation. 23 Secondly, courts in climate change litigation apply general principles and considerations as well as more concrete norms and obligations. International climate change law is defined by broad legal principles, such as the no-harm rule, the precautionary principle, the polluter pays principle or the concept of sustainable development.80 At the same time it consists of narrowly framed treaty-based obligations, in particular the meticulously defined mitigation obligations as well as procedural rules. Similarly, under domestic law, broad principles, such as constitutional commitments to the protection of the environment or a human right to a healthy environment,81 stand alongside specific legislative as well as regulatory measures. Climate change legislation can therefore either address possible violations of general principles as in the cases of Leghari and Urgenda or of rather specific provisions as in Massachusetts v. EPA dealing with the interpretation of the Clean Air Act. It can also focus on the interplay of the two arguing that specific obligations have to be interpreted in light of general principles or that general principles can be derived from more concrete and specific obligations and provisions. 24 Thirdly, climate change litigation is significantly informed by the interplay of environmental law with other areas of law as well as general rules and principles of law. On the international level many rules of general international law can have implications for climate change litigation.82 Moreover, the focus of human rights law on individuals has been employed to advance climate protection goals.83 Domestic courts as well as regional human rights courts have substantiated the right to a healthy environment and paved the way by recognizing the relationship between the need for environmental protection and the right to life84 as well as other human rights. The potential of rights-based approaches for climate change litigation can be seen in the extensive jurisprudence of the Indian Supreme Court85 or in the Urgenda case’s reliance on the European Convention on Human Rights. Moreover, the obligation to protect under human rights and fundamental 78

On the concept of polycentricity see Osofsky, supra (fn. 41), 325; Cole, Climate Law 2 (2011), 395. See Art. 38 ICJ Statute for the ICJ. Arbitration tribunals may, under certain circumstances, also apply domestic law, see Born, International Arbitration: Law and Practice, 2nd ed. 2015, 239. 80 See Bodansky/Brunnée/Rajamani, supra (fn. 43), 40‐55. 81 See Pedersen, in: Lees/Viñuales (eds.), The Oxford Handbook of Comparative Environmental Law, 2019, 1073 (1077‐1080). 82 See ILA, Resolution 2/2014, Declaration of Legal Principles Relating to Climate Change; Mayer, supra (fn. 65), 66‐88; Schwarte/Frank, Climate Law 4 (2014), 201. 83 See Daya-Winterbottom, in: Voigt/Makuch (eds.), Courts and the Environment, 2018, 59. 84 See also Human Rights Committee, General comment No. 36 (2018) on article 6 of the International Covenant on Civil and Political Rights, on the right to life, UN Doc. CCPR/C/GC/36, mn. 62. 85 Rosencranz/Jackson, Col. J. Envtl. L. 28 (2003), 223; Badrinarayana, Brook. J. Int’l L. 43 (2017), 75 (97‐107). 79

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rights doctrine is discussed as a legal basis for farther-reaching climate change mitigation measures.86 Similarly, claims based on domestic law rely to a great extent on constitutional fundamental rights as in the Leghari case, Juliana v. United States or in the constitutional complaint pending before the German Constitutional Court. Moving beyond constitutional law, climate change litigation builds on rules stemming from other areas of law. In this sense, the Dutch Civil Code played an important role in the Urgenda case, and the claims raised in Lliuya v. RWE are primarily based on the general provision dealing with interferences with property under the German Civil Code.87 The prospect of success for climate change litigation will, in this context, depend on the openness and adaptability of these rules to the phenomenon of climate change, as discussions in particular with regard to the suitability of tort law to deal with climate change damages88 show. This reliance on general principles and rules of public as well as private law shows the potential for climate change litigation even in the absence of more specific climate change laws. It moreover allows for an easier transfer of legal arguments across legal orders since the right to life, tort law and property protection may operate in similar manners in different domestic legal regimes.89

3. Political and social environment Moving beyond the internal legal perspective, the willingness of NGOs and other 25 potential claimants to bring climate change cases before the courts and the openness of judges towards climate protection arguments will, to a certain extent, also depend on the political and social environment in which litigation takes place: While courts are bound to apply the law and therefore rely on the political actors to make law in order to contribute to climate protection, they can step in when political action stalls. Considering that climate change law consists of well-established principles of environmental law and against the background of the implications of fundamental rights as well as general legal principles courts can adjudicate on the inactivity of political actors or ineffectiveness of the measures taken, as in the Leghari and Urgenda cases. Climate change litigation may even primarily be sought, when political actors are unwilling to regulate or legislate.90 However, courts will also have to take into account or at least be aware of what is possible within a specific political climate,91 even when they explicitly deny the relevance of such considerations as the District Court of the Hague did in the Urgenda decision.92 And courts will also play a role when there is strong action by the political actors, although their roles might then change from filling the lacunae of political inaction to adjudicating and thereby interpreting the laws and regulatory measures taken by the legislature and the executive. Ambitious international agreements on climate protection can also motivate courts to advance more ambitious judicial decisions.93 Climate change litigation furthermore takes place within a societal space with media 26 attention and public opinion as significant factors. The rapidly growing awareness for the devastating impact of climate change and for the urgency of resolute action may 86

Peel/Osofsky, supra (fn. 28), 37; Cremer, ZUR 2019, 278. See Frank, NVwZ 2017, 664 (665‐669). 88 See Grossman, supra (fn. 60), 193. 89 Carnwath, J. Envtl. L. 28 (2016), 5 (9). 90 Peel/Osofsky, supra (fn. 38), 339; Osofsky/Peel, supra (fn. 38), 332‐333; Sands, supra (fn. 13), 23; Brunnée/Goldberg/Lord/Rajamani, supra (fn. 60), 6; Carnwath, J. Envtl. L. 26 (2014), 177 (181‐182); Ewing/Kysar, supra (fn. 73), 350; Setzer/Nachmany, in: Jordan/Huitema/van Asselt/Forster (eds.), Governing Climate Change, 2018, 47 (56‐57); Bergkamp/Hanekamp, EEELR 2015, 102 (103). 91 Osofsky/Peel, supra (fn. 38), 332‐333. 92 District Court of the Hague, Urgenda Foundation, supra (fn. 5), mn. 4.98. 93 Mayer, supra (fn. 65), 248. 87

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contribute to the willingness of NGOs and individuals to bring cases before the courts. The public may be more willing to contribute financially to the strategic litigation endeavours of environmental NGOs, and attempts of political or corporate actors to bar such litigation – whether through cutting the funds for publicly financed environmental organizations or through legislative reform limiting the rules of standing for NGOs – will have more or less prospects for success, depending on public opinion. Even judges will not remain unimpressed by the prevailing opinions in society and science and might be more willing to advance progressive climate protection goals when society at large feels the pressing need for action. The awareness of judges for the situatedness of their decisions in a political and social environment can even be traced in some of the landmark climate change decisions: In Massachusetts v. EPA, for example, Justice Stevens began the reasoning of the majority decision with a description of the phenomenon and of the science of global warming and referred to the “unusual importance” of the issue as a ground to grant the writ of certiorari.94 And in the Urgenda decision, the District Court of the Hague went above and beyond to situate its ruling within the global discussion of the causes, effects and remedies of climate change.

IV. Evaluation: the legitimate functions of courts in climate protection 27

Courts engage in climate change litigation, have already issued landmark decisions and can be expected to do so increasingly in the future. From a normative perspective, however, doubts about the legitimacy of the role of courts in climate protection have been raised. Courts have dismissed cases with reference to the separation of powers95 or have felt obliged to address the compatibility of their ruling with the system of separation of powers.96 Notwithstanding the varying meaning and significance of the doctrine in different legal systems97 and debates about its rationale,98 the constitutional allocation of power and authority among different governmental branches and organs implies that each branch has its own competences and may not encroach on the realm of the others and that some governmental bodies are more suitable for some forms of exercise of public authority than others.99 Against the conceptual background of the separation of powers, the different objections generally raised against judicial climate protection can be discussed within three groups

1. Climate change litigation between law and politics 28

A first common criticism raised against climate change litigation holds that courts, when they advance far-reaching climate protection objectives, might overstep the boundaries of the law and enter into the realm of politics.100 While the appropriateness 94

U.S. Supreme Court, Massachusetts v. EPA, supra (fn. 3), 506. See Federal Court, Friends of the Earth v. Canada, supra (fn. 4), mn. 25. See District Court of the Hague, Urgenda Foundation, supra (fn. 5), mn. 4.94‐4.102. 97 See Martinez, in: Rosenfeld/Sajó (eds.), The Oxford Handbook of Comparative Constitutional Law, 2012, 547 (548); on its transferability to the EU and international level Möllers, The Three Branches, 2013, 150‐226. 98 See Carolan, The New Separation of Powers, 2009, 18‐45; Möllers, supra (fn. 97), 16‐50. 99 See Martinez, supra (fn. 97), 548; with an emphasis on efficiency Barber, Camb. L.J. 60 (2001), 59; with an emphasis on legitimacy Möllers, supra (fn. 97), 51‐109. 100 See, e.g., Bergkamp/Hanekamp, supra (fn. 90), 105‐107; Bergkamp, JEEPL 12 (2015), 241 (245‐248); Wegener, ZUR 2019, 3 (10‐11); Zahar, International Climate Change Law and State Compliance, 2015, 24; Voland, NVwZ 2019, 114. 95 96

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of this criticism depends on the specific decision and its reasoning, some features of climate change litigation make it particularly amenable to this objection: Firstly, within claims aimed at increased mitigation governance courts will oftentimes 29 not scrutinize measures issued by the legislature or the executive but rather address their failure to act as, for example, in the cases of Leghari or Urgenda. As is widely discussed within fundamental and human rights doctrine, the recognition and judicial enforcement of positive obligations can be deemed problematic due to the political leeway of the legislature and the executive with regard to balancing and prioritizing different, oftentimes conflicting political goals and the allocation of public funds to specific projects.101 However, insofar as legally binding climate change mitigation obligations of states exist, either under international or national law, courts are, within the procedural framework in which they operate, called upon to adjudicate on the compliance with these obligations. In declaring that the executive or the legislature violated these obligations, courts do not illegitimately engage in politics. The authority of courts to order the executive or even the legislature to take specific measures is, however, limited due to the political leeway of the two branches of government, a limit even the progressive Urgenda court respected.102 When scrutinizing whether climate protection measures are legally sufficient, courts 30 face a second challenge with regard to the applicable standards: While it might be possible for courts to determine a failure to comply with legal obligations when the state has entered into binding reduction targets, the task to develop a threshold standard beyond such specific obligations is inherently more difficult. Consequently, a fundamental challenge against the Urgenda decision is the way in which the court reached the conclusion that the state needs to ensure that greenhouse gas emissions will be at least 25 % lower in 2020 than they were in 1990, relying heavily on its reading of the reports of the Intergovernmental Panel on Climate Change.103 In the absence of concrete legally binding mitigation targets the determination of specific limits by courts is problematic. The determination of a concrete emission threshold is an inherently political task. Thirdly, when courts derive rules for climate protection from norms that were not 31 specifically meant to address climate change, such as, for example, fundamental rights, tort or property law or even general principles of environmental law as the no harm or the precautionary principle, their reasoning might be criticized for circumventing the legislature and its competence to decide upon the rules dealing with climate change mitigation and adaptation. However, while courts have to ensure that their rulings do not contradict the legislature, the interpretation of general principles of law as well as the application of such principles and rules to new social phenomena is inherently the ambit of the judiciary. While the specific implications for example of the fundamental right to life, the tort law of nuisance or the no harm principle for climate change related threats are open for debate, courts do not overstep their boundaries when they apply these general principles and rules to climate protection cases. Although the specific content of many international as well as national rules and their implications for climate protection may be open for debate, the indeterminacy of many rules of climate change law does not mean that courts are barred from deciding cases based on these rules. It is up to the political actors to enter into more concrete international treaty obligations or

101

See Fredman, Comparative Human Rights Law, 2018, 95‐108. See Spijkers, in: Voigt/Makuch (eds.), Courts and the Environment, 2018, 305, (332‐333). 103 See Spijkers, supra (fn. 102), 319‐322; Bergkamp/Hanekamp, supra (fn. 90), 107‐110; Wegener, supra (fn. 100), 4; Mayer, supra (fn. 47), 181‐184. 102

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pass farther-reaching domestic laws. But it is the authority of the courts to interpret and, within boundaries, develop the law as it stands.104

2. The suitability of judicial engagement with climate change A second group of objections against climate change litigation is based on the assumption that courts are generally not the appropriate forum to address climate change.105 Assuming that the allocation of functions to different branches of government aims at an effective exercise of powers with regard to the organization, composition, mode of operation and procedure,106 this line of criticism can be understood from the perspective of separation of powers. A major thrust of contestation is based on the peculiarities of climate change as a “super wicked problem”,107 encompassing the relationship between cause and effect, the interplay between anthropogenic measures and natural circumstances, the scientific uncertainties surrounding climate change, the relevance of different actors, including international organizations, states and public agencies, corporations as well as NGOs and consumers, its global reach, and finally the interplay between environmental concerns and other, in particular economic interests. Against this background it is argued, in the spirit of Lon Fuller’s critique of the limits of adjudication of polycentric problems,108 that climate change governance requires the evaluation of political and scientific factors as well as balancing of different interests, a task that courts are neither equipped nor legitimated to undertake.109 Consequently, U.S. courts have dismissed climate change litigation on the basis of the political question doctrine.110 33 This argument against judicial climate protection does again not apply to all forms of climate change litigation: When courts apply legal rules dealing specifically with climate change, they apply the normative result of the legislature dealing with the scientific and political dimension of the issue and weighing of the competing interests. The argument therefore only applies in the absence of such specific legal rules, for example when courts deduce mitigation targets or adaptation consequences from general legal principles and rules. In this context, however, the suitability critique coincides with the aforementioned contestation that courts transgress from the legal into the political realm. That courts generally only adjudicate particular legal disputes and do not deal with the issue of climate change in a comprehensive manner, taking into account its national as well as international dimension and its implications for the economy and society in general, is also not a convincing argument against judicial climate protection since it lies in the nature of courts that they only provide a specific judicial approach to a specific aspect of a social problem. As far as it is argued that climate change litigation may encounter difficulties with regard to the competences and knowledge of judges or the resources of the judicial system,111 this does not imply that courts are unsuitable to deal with climate change but rather indicates the need for judicial capacity-building in climate-related matters.112 32

104

See von Bogdandy/Venzke, In Whose Name?, 2014, 101‐111. See, e.g., Bergkamp/Hanekamp, supra (fn. 90), 107. 106 See German Federal Constitutional Court, Rechtschreibreform, BVerfGE 98, 218 (251‐252). 107 Lazarus, Cornell L. Rev. 94 (2009), 1153; Hilson, J. Envtl. L. 25 (2013), 359 (363); Incropera, Climate Change: A Wicked Problem, 2016. 108 Fuller, Harv. L. Rev. 92 (1978), 353 (394‐404). 109 See, e.g., Bergkamp/Hanekamp, supra (fn. 90), 107. 110 See, e.g., Connecticut v. American Electric Power, 406 F. Supp. 2d 265, 272 (S.D.N.Y. 2005). 111 Robinson, supra (fn. 76), 18. 112 Similarly Graser, ZUR 2019, 271 (276‐277). 105

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3. The effectiveness of climate change litigation This leads to a third stream of contestation which assumes the ineffectiveness of 34 litigation as an instrument for the protection of the climate. The focus of climate change activists on litigation is called into question as encompassing “illusionary expectations”.113 Critics of climate change litigation rather emphasize the importance of political solutions.114 With regard to effectiveness, it has been argued that even successful climate change cases will not significantly contribute to the reduction of greenhouse gas emissions. Eric Posner, for example, has pointed out that while Massachusetts v. EPA has been lauded as a landmark decision for climate protection, its effects would at best be marginal since regulation by the EPA could not significantly affect climate change on a global level.115 This criticism misses the point for two reasons. Firstly, while climate protection efforts are needed on a global scale, measures taken on the national level are not futile. The polycentricity of climate change does not only mean that multiple layers of governance play a role in combatting climate change, it also means that actors on all levels of governance can, collectively as well as individually, contribute to mitigation as well as adaptation efforts.116 Secondly, the importance of climate change litigation may go well beyond the immediate effects of a particular court decision.117 Massachusetts v. EPA massively impacted the regulatory activities of the EPA as well as the overall approach of the U.S. administration to emission regulation118 and even influenced international treaty negotiations.119 It has therefore been regarded as a turning point in U.S. climate change regulation and been attributed the potential to become “one of the most important court decisions in history”.120 A narrow focus on the immediate implications of a court decision for climate change 35 regulation, moreover, misses the multifunctional dimension of judicial proceedings. Judicial decisions not only legitimize the exercise of public authority when legislative or executive measures are upheld121 but can also add to the credibility of arguments within public debates: Court decisions that highlight the anthropogenic character of climate change can contribute to fighting climate change scepticism or denial.122 Within the internal perspective of the legal system, domestic as well as international courts can contribute to clarifying the at least in part notoriously vague und uncertain rules of climate change law and thereby contribute to the crystallization of a “common law for the environment”.123 Finally, while climate change litigation regularly aims at immediately affecting public regulation or corporate practices, litigants can also intent to 113

Wegener, supra (fn. 100), 11‐12. See, e.g., Posner, U. Pa. L. Rev. 155 (2007), 1925; Hsu, supra (fn. 43), 165. 115 Posner, supra (fn. 114), 1926, relying on Sunstein, Harv. Envtl. L. Rev. 31 (2007), 1; a similar argument is raised against the Urgenda decision by Bergkamp/Hanekamp, supra (fn. 90), 113. 116 Emphasizing the importance and significance of smaller-scale actors in climate change protection Ostrom, Ann. Econ. Finance 15 (2014), 97; see also Mayer, supra (fn. 47), 179‐180; Setzer/Nachmany, supra (fn. 90), 58; Osofsky, Va. J. Int’l L. 49 (2009), 585; Kassmann, Duke J. Comp. & Int’l L. 24 (2013), 201 (241). 117 See Peel/Osofsky, supra (fn. 38), 28‐53; Preston, Climate Law 2 (2011), 485. 118 See Peel/Osofsky, supra (fn. 38), 63‐71, 312‐317; Hodas, in: Voigt/Makuch (eds.), Courts and the Environment, 2018, 345; Gerrard/Wilensky, in: Farber/Peeters (ed.), Climate Change Law, Vol. I, 2016, 359. 119 Osofsky, supra (fn. 41), 332; Hunter, in: Burns/Osofsky (eds.), Adjudicating Climate Change, 2009, 357 (364‐367); on the potentially negative impact on international negotiations Bergkamp/Hanekamp, supra (fn. 90), 111. 120 Carnwath, supra (fn. 89), 8. 121 See von Bogdandy/Venzke, supra (fn. 104), 14‐17. 122 Preston, J. Envtl. L. 28 (2016), 11 (13); Sands, supra (fn. 13), 26, 29‐30; Hunter, supra (fn. 119), 360‐364. 123 Carnwath, supra (fn. 90), 187; Preston, supra (fn. 122), 15; Hunter, supra (fn. 119), 367‐370. 114

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generate public attention and raise awareness for climate change124 and the proceedings can contribute to a change in attitude,125 even on a global scale.126 As long as the procedural requirements are met, climate change litigation is, contrary to the holding of the dissenting justices in Massachusetts v. EPA,127 not merely symbolic and does not delegitimize the judicial system.128

V. Conclusion: potential and limitations of judicial climate protection 36

With regard to the role of courts in climate protection, there is no reason to be either overly enthusiastic or overly critical. Courts perform their regular functions within climate change litigation.129 They settle disputes and scrutinize the actions of public as well as private actors, ensure compliance with legal obligations and enforce the rule of law. In light of the openness of many principles and rules of environmental law as well as the uncertainties regarding the implications of human and fundamental rights as well as tort and property law, the judicial interpretation and development of the law plays a crucial part in establishing the legal order for climate change. Courts are starting to explore the potential as well as the limits of climate change law and have commenced a transnational debate involving other domestic as well as international courts, political actors, civil society and legal academia. While judges are no natural allies in the fight against climate change and court decisions, especially decisions of international courts, can potentially also curtail climate protection ambitions130 or lead to political as well as judicial backlash,131 domestic as well as international litigation is and will remain an important regulatory instrument within the polycentric system of climate change governance. 124

Preston, supra (fn. 122), 13‐14; Peel/Osofsky, supra (fn. 38), 221‐265, 309, 314; Meltz, supra (fn. 29),

34. 125

Savaresi/Auz, supra (fn. 9), 261; sceptical Posner, supra (fn. 114), 1944‐1945. Sands, supra (fn. 13), 26. 127 U.S. Supreme Court, Massachusetts v. EPA, supra (fn. 3), 546‐547. 128 Spijkers, supra (fn. 102), 341. 129 Markell/Ruhl, supra (fn. 12), 15. 130 Voigt, supra (fn. 39), 17‐18. 131 See Peel/Osofsky, supra (fn. 38), 283‐308; Setzer/Nachmany, supra (fn. 90), 57. 126

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D. Climate change and duties to protect with regard to fundamental rights Bibliography: Abbott, Strengthening the Transnational Regime Complex for Climate Change, Transnational Environmental Law Vol. 3 (2014), 55; Bähr/Brunner/Casper/Lustig, KlimaSeniorinnen: lessons from the Swiss senior women’s case for future climate litigation, Journal of Human Rights and the Environment Vol. 9 (2018), 194; Bates, The Evolution of the European Convention on Human Rights, 2010; Braig, Umweltschutz durch die Europäische Menschenrechtskonvention, 2013; Cullet, Human Rights and Climate Change: Broadening the Right to Environment, in Gray/Tarasofsky/Carlarne (eds.), The Oxford Handbook of International Climate Change Law, 2016, 496; Foster/Galizzi, Human Rights and Climate Change: Building Synergies for a Common Future, in Farber/Peeters (eds.), Climate change law, 2016, 43; Graser, Strategic Litigation – oder: Was man mit der Dritten Gewalt sonst noch so anfangen kann, Rechtswissenschaft Vol. 10 (2019), 371; Gross, Postnationale Demokratie – Gibt es ein Menschenrecht auf transnationale Selbstbestimmung?, Rechtswissenschaft Vol. 2 (2011), 125; Hänni, Menschenrechtsverletzungen infolge Klimawandels, Europäische Grundrechte-Zeitschrift Vol. 46 (2019), 1; Hart, The Development of Positive Obligations under the European Convention on Human Rights by the European Court of Human Rights, 2004; Jacobs/White/Ovey, The European Convention on Human Rights, 7th ed. 2017; Kahl/Daebel, Climate Change Litigation in Germany, European Energy and Environmental Law Review Vol. 28 (2019), 67; Knox, Human Rights Principles and Climate Change, in Gray/Tarasofsky/Carlarne (eds.), The Oxford Handbook of International Climate Change Law, 2016, 213; Kommers, The Constitutional Jurisprudence of the Federal Republic of Germany, 2nd ed. 1997; Lewis, Environmental Human Rights and Climate Change – Current Status and Future Prospects, 2018, 43; Limon, Human Rights and Climate Change: Constructing a Case for Political Action, Harvard Environmental Law Review Vol. 33 (2009), 439; May/Daly, Judicial handbook on environmental constitutionalism, 2017; Okubo, Climate Change Litigation: A Global Tendency, in Ruppel/Roschmann/Ruppel-Schlichting (eds.), Climate Change: International Law and Global Governance, Vol. I, 2013, 741; Peel/Osofsky, A Rights Turn in Climate Change Litigation?, Transnational Environmental Law Vol. 7 (2018), 37; Peel/Osofsky, Litigation as a Climate Regulatory Tool, in Voigt (ed.), International Judicial Practice on the Environment: Questions of Legitimacy, 2019, 311; Roschmann, Climate Change and Human Rights, in Ruppel/Roschmann/Ruppel-Schlichting (eds.), Climate Change: International Law and Global Governance, Vol. I, 2013, 203; Rotoullie, Le contentieux de la légalité, Revue française de droit administratif Vol. 35 (2019), 644; Schabas, The European Convention on Human Rights, 2015; Shelton, Human Rights, Health and Environmental Protection: Linkages in Law and Practice, Human Rights & International Legal Discourse Vol. 1 (2007), 9; Sicilianos, Preventing Violations of the Right to Life: Positive Obligations under Article 2 of the ECHR, Cyprus Human Rights Law Review Vol. 3 (2014), 117; Simonis, “Energieoption” plus “Waldoption”. Plädoyer für eine Doppelstrategie der Klimapolitik, Zeitschrift für Umweltpolitik & Umweltrecht Vol. 42 (2019), 358; Spijkers, The Urgenda case: a successful example of public interest litigation for the protection of the environment?, in Voigt/Makuch (eds.), Courts and the Environment, 2018, 305; Van Dyke, A Proposal to Introduce the Right to a Healthy Environment into the European Convention Regime, Virginia Environmental Law Journal Vol. 13 (1993/94), 323; Weber, European Constitutions Compared, 2019; Wegener, Urgenda – Weltrettung per Gerichtsbeschluss?, Zeitschrift für Umweltrecht Vol. 30 (2019), 3; Williams, The impact of climate change on indigenous people – the implications for the cultural, spiritual, economic and legal rights of indigenous people, The International Journal of Human Rights, Vol. 16 (2012), 648.

Contents I. Introduction ..................................................................................................... II. Constitutional foundations ........................................................................... 1. Protection of the environment ................................................................ 2. Protection of human rights ...................................................................... III. The Jurisprudence of the European Court of Human Rights .............. 1. The protection against dangerous activities ......................................... 2. The protection against natural disasters ............................................... 3. Open questions ........................................................................................... IV. The legal problems of positive obligations................................................ 1. Individual rights..........................................................................................

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Part 1. Fundamental questions 2. Access to courts .......................................................................................... 3. Causation...................................................................................................... 4. Scope of obligations ................................................................................... 5. Separation of powers ................................................................................. V. Conclusion........................................................................................................

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I. Introduction In the first period of international negotiations on climate change, human rights were not relevant. They are mentioned neither in the United Nations Framework Convention on Climate Change nor in the Kyoto Protocol. Only after the year 2000 awareness rose that fundamental rights are in many ways concerned by actual and future effects of global warming. 2 The first international petition linking climate change and human rights was filed in 2005 on behalf of an alliance of Inuit in Canada and the United States at the InterAmerican Commission on Human Rights.1 It argued that the effects of global warming constitute violations of Inuit human rights for which the United States are responsible. The petition was rejected because of insufficient information but it raised public awareness. In 2007, the representatives of the Small Island Developing States adopted the Male’ Declaration on the Human Dimension of Global Climate Change2 urging the Office of the United Nations High Commissioner for Human Rights to conduct a detailed study into the effects of climate change on the full enjoyment of human rights, which includes relevant conclusions and recommendations thereon, to be submitted prior to the tenth session of the Human Rights Council. 3 This report on the relationship between climate change and human rights has been delivered in the year 2009 by the Office of the United Nations High Commissioner for Human Rights.3 It summarizes the most important aspects of the effects of global warming. Based on the findings of the IPCC the main observed and projected changes in weather patterns related to global warming are: the contraction of snow-covered areas and shrinking of sea ice; sea-level rise and higher water temperatures; increased frequency of hot extremes and heatwaves; heavy precipitation events and increase in areas affected by drought and increased intensity of tropical cyclones (typhoons and hurricanes). The report indicates that global warming will potentially have implications for the full range of human rights, but it provides examples of rights which seem to relate most directly to climate change-related impacts. Among these are, e.g., the right to life (Art. 6 ICCPR), the right to adequate food and adequate housing (Art. 11 ICESCR) and the right to health (Art. 12 ICESCR). Meanwhile also the UN Human Rights Council has adopted several resolutions recognizing the adverse effects of climate change on human rights.4 4 Although most governments in the world recognize the duty to reduce greenhouse gas emissions and have accepted the obligations defined in the United Nations Framework Convention on Climate Change and the Paris Agreement, many states have not yet properly implemented the necessary measures. The decarbonisation of energy supply, traffic and agriculture has to be enforced against vested interests, often with 1

1 Documents available at http://climatecasechart.com/non-us-case/petition-to-the-inter-american-commission-on-human-rights-seeking-relief-from-violations-resulting-from-global-warming-caused-by-actsand-omissions-of-the-united-states/ (27.12.2019). 2 Available at http://www.ciel.org/Publications/Male_Declaration_Nov07.pdf (27.12.2019). 3 https://www.ohchr.org/EN/Issues/HRAndClimateChange/Pages/StudyImpact.aspx (27.12.2019). 4 Cullet, Human Rights and Climate Change: Broadening the Right to Environment, in Gray/Tarasofsky/ Carlarne (eds.), The Oxford Handbook of International Climate Change Law, 2016, 496 (503‐4).

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important political influence. In many states, environmental associations, citizens’ groups and individuals have tried to speed up the procedure of democratic decision making by bringing cases into national courts in order to force governments and parliaments to implement more measures against global warming. The court actions are mainly based on provisions enshrined in national constitutions or legislation, but also on European and international law. The most important line of argument is always based on the duty to protect human rights. Climate change litigation is a global phenomenon and petitions based on human 5 rights have been filed in many countries.5 This report will focus mainly on Europe, as the legal orders in the European Union are based on a more or less common understanding of human rights, derived mainly from the European Convention for the Protection of Human Rights and Fundamental Freedoms. Whereas the constitutional foundations of rights related to the protection of the environment are far from uniform (II.), the jurisprudence of the European Court of Human Rights has built a common ground for the duty to protect against environmental harm (III.). Based on this understanding and the existing case law on the national level, the main lines of legal argument related to duties to take action against climate change will be developed (IV.).

II. Constitutional foundations Although the phenomenon of global warming is known at least for 40 years and 6 despite the growing knowledge that it is a very serious problem, only very few constitutions include special provisions on climate change. Outside of Europe, examples can be found in Tunisia6 and in the new Cuban constitution adopted in February 2019, in the context of international cooperation7. In the European Union, Art. 191 TFEU defines the promotion of measures combating climate change as one of the objectives of the Union policy on the environment. Otherwise constitutional duties to fight against global warming can be derived either from general clauses on the protection of the environment (1.) or from human rights (2.).

1. Protection of the environment The constitutions of more than 150 states in the world include clauses on the 7 protection of the environment.8 There is no doubt that this also includes the protection of the climate against global warming.9 There is much variety with respect to the 5 UNEP, The Status of Climate Change Litigation, 2017, available at https://wedocs.unep.org/bitstream/ handle/20.500.11822/20767/climate-change-litigation.pdf (27.12.2019); Peel/Osofsky, A Rights Turn in Climate Change Litigation?, Transnational Environmental Law Vol. 7 (2018), 37; cf the database http:// climatecasechart.org. 6 Art. 45 para 1 Constitution of 2014: “The state guarantees the right to a healthy and balanced environment and the right to participate in the protection of the climate.” 7 Art. 16 Constitution of 2019: “The Republic of Cuba bases its international relations on the exercise of its sovereignty as well as on the antiimperialist and internationalist principles in accordance with the interests of the people and, in consequence … f) Promotes the protection and conservation of the environment as well as responding to climate change, which threatens the survival of the human species, through the recognition of common, yet differential, responsibilities; the establishment of a more just and equitable international economic order as well as the eradication of irrational patterns of production and consumption …” 8 Lewis, Environmental Human Rights and Climate Change – Current Status and Future Prospects, 2018, 43‐55. 9 For Germany cf Federal Constitutional Court, BVerfGE 118, 79 (110); 137, 350 (369).

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wording and the scope of application of these provisions. Based on the legal nature of the national clauses protecting the environment, three main categories can be distinguished. They can also be combined in one text. 8 In a majority of constitutions of EU member states we find a duty of the state to protect the environment.10 These provisions define duties for the national legislator, but they do not create rights of individual citizens and therefore they cannot be directly invoked in the national courts.11 9 In thirteen member states of the European Union the national constitutions state a right of citizens to a healthy environment.12 Nevertheless, it depends on national provisions on the access to general or constitutional courts whether such a right can be effectively invoked. For instance, Art. 53 Constitution of Spain does not mention the right to a healthy environment (Art. 45) among the provisions a constitutional complaint can be based on. 10 A third category of constitutional provisions make it a duty of citizens to protect the environment.13 Such a clause can be the basis for legislation restricting individual freedoms, e.g. economic activities causing harm to the environment. Whether they can be invoked in courts is again a question of national procedural law.

2. Protection of human rights 11

As not all national constitutions include provisions on the protection of the environment and as not all of these provisions can be invoked by individuals in the courts, litigation with the aim to promote measures against climate change is often based on (other) human rights.14 Many national constitutional courts as well as the jurisprudence of the European Court of Human Rights and international human rights bodies have recognized for decades that human rights cannot only be claimed against state action restricting individual freedom, but also impose a duty on the state to prevent violations 10 § 3 Austrian Federal Constitutional Act on sustainability, animal protection, comprehensive environmental protection, on water and food security as well as research, Art. 7bis Constitution of Belgium, Art. 15 Constitution of Bulgaria, Art. 3 Constitution of Croatia, Art. 6 Charter for the Environment of France, Art. 20a Basic Law of Germany, Art. 24 para. 1 Constitution of Greece, Art. XX para. 2 Constitution of Hungary, Art. 9 Constitution of Italy, Art. 54 Constitution of Lithuania, Art. 11bis Constitution of Luxembourg, Art. 9 para. 2 Constitution of. Malta, Art. 21 Constitution of the Netherlands, Art. 5, 74 Constitution of Poland, Art. 9 e), 66 Constitution of Portugal, Art. 135 para. 2 e) Constitution of Romania, Chap. 1 § 2 para. 3 Constitution of Sweden, Art. 44 para. 4 Constitution of Slovakia, Art. 72 para. 2 Constitution of Slovenia, Art. 45 para. 2 Constitution of Spain. 11 For Germany Kahl/Daebel, Climate Change Litigation in Germany, European Energy and Environmental Law Review Vol. 28 (2019), 67 (74). 12 Art. 23 para 2 no. 4 Constitution of Belgium, Art. 55 Constitution of Bulgaria, Art. 35 para 1 Czech Charter of Fundamental Rights and Freedoms, § 20 Constitution of Finland, Art. 1 Charter for the Environment of France, Art. 24 para 1 Constitution of Greece, Art. XXI para 1 Constitution of Hungary, Art. 115 Constitution of Latvia, Art. 66 para 1 Constitution of Portugal, Art. 35 para 1 Constitution of Romania, Art. 44 para 1 Constitution of Slovakia, Art. 72 para 1 Constitution of Slovenia, Art. 45 para 1 Constitution of Spain. 13 § 53 Constitution of Estonia, Art. 6 Charter for the Environment of France, Art. 53 para. 3 Constitution of Lithuania, Art. 86 Constitution of Poland, Art. 66 para. 1 Constitution of Portugal, Art. 44 para. 2 Constitution of Slovakia, Art. 45 para. 1 Constitution of Spain. 14 Limon, Human Rights and Climate Change: Constructing a Case for Political Action, Harvard Environmental Law Review Vol. 33 (2009), 439; Okubo, Climate Change Litigation: A Global Tendency, in Ruppel/Roschmann/Ruppel-Schlichting (eds.), Climate Change: International Law and Global Governance, Vol. I, 2013, 741; Foster/Galizzi, Human Rights and Climate Change: Building Synergies for a Common Future, in Farber/Peeters (eds.), Climate change law, 2016, 43; Knox, Human Rights Principles and Climate Change, in Gray/Tarasofsky/Carlarne (eds.), The Oxford Handbook of International Climate Change Law, 2016, 213; Hänni, Menschenrechtsverletzungen infolge Klimawandels, Europäische Grundrechte-Zeitschrift Vol. 46 (2019), 1.

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of human rights by other human actors or natural disasters.15 Although the foundation of duties to protect human rights is rarely disputed, the question what kind of duties can be derived, especially if they are imposed on the legislator, is often controversial. It is obvious that courts do not require that governments prevent all environmental harm but only those effects seriously affecting human rights.16 The very nature of climate change complicates the definition of positive obligations. 12 It is a global phenomenon caused by a very large number of contributors. The effects are mainly not exactly predictable as they only increase the probability of harmful events. Therefore the individuals concerned are often not yet known. The jurisprudence of the European Court of Human Rights provides a basis for climate change litigation but it does not yet answer all problems. Hence, it is not surprising that the results of existing national case law are very divergent.

III. The Jurisprudence of the European Court of Human Rights The European Court of Human Rights has developed a rich jurisprudence concerning 13 the protection against environmental harms, although no special rights concerning the environment are enshrined in the Convention or one of the protocols. Several proposals of the Parliamentary Assembly to create a protocol on environmental rights were not successful.17 Therefore, the respective rights had to be derived from other rights found in the provisions of the Convention. Most cases do not deal with interferences by state authorities but either with dangerous activities of private persons, especially enterprises (1.), or with natural disasters (2.). This jurisprudence does not answer all questions on whether a positive obligation to prevent harm caused by climate change can be derived from the respective human rights (3.).

1. The protection against dangerous activities For several decades, the Strasbourg Court has been following a jurisprudence devel- 14 oping positive obligations to protect against dangerous activities causing environmental harm.18 As there is no explicit right to health in the Convention, most of the complaints are based on Art. 8 ECHR stating that everyone has the right to respect for his private and family life, his home and his correspondence. From the wording as a “right to respect” the Court has concluded that it entails negative as well as positive obligations.19 The states must not only abstain from interferences by public authorities but they also have to protect individuals from infringements by others. In the landmark judgement Lopez Ostra v. Spain the Court has given the following reasoning: “severe environmental pollution may affect individuals’ well-being and prevent them from enjoying their homes in such a way as to affect their private and family life adversely, without, however, seriously endangering their health.”20 15 Cf, e.g., Bates, The Evolution of the European Convention on Human Rights, 2010, 346‐7; Knox (fn. 14), 223. 16 Cullet, supra (fn. 4), 502. 17 Braig, Umweltschutz durch die Europäische Menschenrechtskonvention, 2013, 186‐188. 18 A summary of more than 100 cases in Braig, ibid, 7–181. 19 Hart, The Development of Positive Obligations under the European Convention on Human Rights by the European Court of Human Rights, 2004, 181‐186; Schabas, The European Convention on Human Rights, 2015, 367‐369. 20 ECtHR, Lopez Ostra v. Spain, Application no. 16798/90, Judgement 9 December 1994, mn. 51; cf also ECtHR, Tatar v. Romania, Application no. 67021/01, Judgement 27 January 2009, mns 85‐88.

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An individual complaint based on Art. 8 ECHR is admissible only if the victim can convince the Court that a present violation exists. If there is merely a risk of a future violation, the individual applicant is only a victim in the sense of Art. 34 ECHR if he or she produces reasonable and convincing evidence of the probability of the occurrence of a violation concerning him or her personally. Mere suspicions or conjectures are not enough in that respect. The applicant must be able to assert, arguably and in a detailed manner, that for lack of adequate precautions taken by the authorities the degree of probability of the occurrence of damage is such that it can be considered to constitute a violation, on condition that the consequences of the act complained of are not too remote.21 The Court will accept this only in wholly exceptional circumstances. Accordingly, it held in various cases that the minimum threshold of severity required in order to find a violation of Art. 8 of the Convention had not been attained. For instance, an application was inadmissible as being manifestly ill-founded because it had not been demonstrated that the strength of the electromagnetic field created by the high-voltage line had attained a level capable of having a harmful effect on the applicants’ private and family sphere.22 Even if the pollution affects the rights guaranteed by Art. 8 ECHR, this does not necessarily mean that the Convention is violated. From the very beginning, the Court has stressed that a fair balance has to be struck between the competing interests of the individual and of the community as a whole. Therefore, the state enjoys a certain margin of appreciation in any case.23 As the governmental decision-making process concerns complex issues of environmental and economic policy, the authorities must necessarily involve appropriate investigations and studies in order to allow them to strike a fair balance between the various conflicting interests at stake.24 Especially in cases involving environmental issues, the state must be allowed a wide margin of appreciation and be left a choice between different ways and means of meeting its obligations.25 The measures a state must take in order to prevent harm from the victims of environmental pollution may include a duty to introduce legislation if such a regulation is necessary to ensure an effective protection against the dangerous activity.26 If the state had at its disposal a number of other tools capable of preventing or minimising pollution, the Court may examine whether, in adopting measures of a general character, it complied with its positive duties under the Convention.27 If the effects of a harmful activity are so grave that they threaten human life, Art. 2 ECHR is also applicable.28 This has been recognized by the Court in a case related to an explosion of methane gas at a rubbish dump killing numerous persons, whereas the national authorities had not taken appropriate measures to address that risk. The Court argued that the “positive obligation to take all appropriate steps to safeguard life for the 21 ECtHR, Asselbourg and 78 others v. Luxembourg, Application no. 29121/95, Judgement 29 June 1999 (without margin numbers). 22 ECtHR, Calancea and others v. Moldova, Application no. 23225/05, Judgement 6 February 2018, mn. 31‐33. 23 ECtHR, Lopez Ostra v. Spain (fn. 20), mn. 51. 24 ECtHR, Hatton and others v. United Kingdom, Application no. 36022/97, Judgement 8 July 2003, mn. 128. 25 ECtHR, Dubetska and others v. Ukraine, Application no 30499/03, 10 February 2011, mn. 141. 26 ECtHR, Di Sarno v. Italy, Application no. 30765/08, Judgement 10 January 2012, mn. 106; Schabas, supra (fn. 19), 388: “appropriate regulatory framework” 27 ECtHR, Fadeyeva v. Russia, Application no. 55723/00, Judgement 9 June 2005, mn. 124. 28 Overview by Sicilianos, Preventing Violations of the Right to Life: Positive Obligations under Article 2 of the ECHR, Cyprus Human Rights Law Review Vol. 3 (2014), 117; Jacobs/White/Ovey, The European Convention on Human Rights, 7th ed. 2017, 161‐167.

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purposes of Article 2 … entails above all a primary duty on the State to put in place a legislative and administrative framework designed to provide effective deterrence against threats to the right to life”.29 But also in this case it is noteworthy that the Court did not acknowledge deficiencies in the national legislation, but only a lack of implementation.30

2. The protection against natural disasters A second constellation in the field of environmental law is the protection against natural 20 disasters. In that case the origin of the harm for the individual victims are not human actions, especially emissions by factories or other installations, but the effect of natural hazards, mainly extreme weather events. In these constellations, complaints have been based on the right to life (Art. 2 ECHR) and the right to property (Art. 1 Protocol No 1). The positive obligation of the states to protect human life derived from Art. 2 ECHR is 21 not only relevant if the danger for life is caused by humans, but it includes the protection against natural hazards if the circumstances of a particular case point to the imminence of a natural hazard that had been clearly identifiable, and especially where it concerned a recurring calamity affecting a distinct area developed for human habitation or use. The scope of the positive obligations, imputable to the state in the particular circumstances, depend on the origin of the threat and the extent to which one or the other risk is susceptible to mitigation.31 In the pertinent case, the Court recognized that there were serious administrative flaws because mud slides had occurred on several occasions and a causal link between the authorities’ omissions and the death of many people existed.32 Also the right of every person to the peaceful enjoyment of his possessions according 22 to Art. 1 Protocol No 1 includes positive obligations. The Court ruled that the states have to ensure in their domestic legal systems that property rights are sufficiently protected by law.33 Nevertheless, it draws a “distinction between the positive obligations under Article 2 of the Convention and those under Article 1 of Protocol No. 1 to the Convention. While the fundamental importance of the right to life requires that the scope of the positive obligations under Article 2 includes a duty to do everything within the authorities’ power in the sphere of disaster relief for the protection of that right, the obligation to protect the right to the peaceful enjoyment of possessions, which is not absolute, cannot extend further than what is reasonable in the circumstances. Accordingly, the authorities enjoy a wider margin of appreciation in deciding what measures to take in order to protect individuals’ possessions from weather hazards than in deciding on the measures needed to protect lives.”34 Therefore, in the mudslide case, a violation of Art. 1 Protocol No 1 was not recognized.

3. Open questions Global warming somewhat combines features of both protection against dangerous 23 activities as well as natural disasters. The rise of greenhouse gas emissions is the consequence of human action, as it is essentially the result of the carbon-based industrial civilisation. The main difference from the existing case law is that the effects of global warming are not in a close spatial relation to the emitting activities. All cases decided by the European Court of Human Rights were related to identifiable local sources of 29

ECtHR, Öneryildiz v. Turkey, Application no. 48939/99, Judgement 30 January 2004, mn. 89. Ibid, mn. 132. 31 ECtHR, Budayeva v. Russia, Application no. 15339/02, Judgement 20 March 2008, mn. 137. 32 Ibid, mn. 158. 33 ECtHR, Blumberga v. Latvia, Application no. 70930/01, Judgement 14 October 2008, mn. 67. 34 ECtHR, Budayeva v. Russia, supra (fn. 31), mn. 175. 30

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pollution or danger and thus also of local impact for identifiable persons. Instead, global warming is a result of global emissions. It is not possible to insulate specific sources responsible for specific harm to specific human beings.35 The consequences of climate change are essentially a higher probability of disasters like heat, dryness or flooding and not imputable to identifiable actors. 24 A second specific feature of positive obligations in the field of climate change is that additional state action will essentially require new legislation. It is quite obvious that this will entail restrictions on activities of enterprises as well as households using carbon as an energy source. Coal based energy plants have to be closed down, carbon-based traffic has to be restricted, carbon-based heating systems have to be replaced etc. The decarbonisation of our civilisation will not be possible without regulatory intervention. 25 The Strasbourg court has recognized that positive obligations to protect human rights in the field of environmental law include the duty to create an adequate regulatory framework.36 Nevertheless, no judgement has yet come to the conclusion that a failure to act of a national legislator has occurred. All successful complaints relate to duties of the national executive. The threshold to recognize an omission of the national legislator is higher because this implies a restriction of democratic decision-making processes.

IV. The legal problems of positive obligations The debate on how human rights are affected by climate change started almost twenty years ago.37 Meanwhile it is clear that climate change litigation based on human rights raises many complicated legal problems. The existing national case law that has been published until December 2019 shows that very different solutions can be found. Only in one of the cases reported in Europe the claim against the government has been successful, this was the landmark case of Urgenda vs. The Netherlands.38 Mostly the national courts rejected the claims in a final decision (UK: Plan B) or in decisions by lower courts (Switzerland: KlimaSeniorinnen; Ireland: Friends of the Irish Environment; Germany: Greenpeace et al.). Also a case in the General Court of the EU has not been successful. In other cases a court decision has not yet been taken (France: Notre Affaire à Tous et al. and Commune de Grande-Synthe; Germany: Friends of the Earth Germany et al.; Belgium: Klimaatzaak). 27 Although all court decisions mentioned deal with the duties to protect human rights against the adverse effects of climate change they are based in the national legal order and raise specific problems, e.g. concerning the admissibility. The following analysis will not cover all aspects but focus on some common problems related with the legal reasoning in order to derive positive obligations. The existing case law is mentioned where it is relevant for the problem discussed. 26

1. Individual rights 28

In climate change litigation many human rights are relevant. In this section an overview of the most important substantive rights, recognized in global as well as in regional European human rights instruments, is given. The rights of special groups like 35

Lewis, supra (fn. 8), 27. Cf supra (fn. 29); Braig, supra (fn. 17), 230. 37 Overview by Lewis, supra (fn. 8), 153‐157. 38 English summary of the final decision by the Hoge Raad (Supreme Court) available at https://www. rechtspraak.nl/Organisatie-en-contact/Organisatie/Hoge-Raad-der-Nederlanden/Nieuws/Paginas/DutchState-to-reduce-greenhouse-gas-emissions-by-25-by-the-end-of-2020.aspx (27.12.2019). 36

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indigenous people39 or children, granted in special human rights instruments, can be relevant, too, but they are outside the scope of this general report. Additional aspects as the right to adequate information on the environment as well as compensation or redress will not be treated either.40 In the jurisprudence of the European Court of Human Rights Art. 8 ECHR is the 29 main human right used in environmental cases, insofar as it protects the right to privacy and the home. The relation of the two elements of Art. 8 ECHR – privacy and home – is not always clear.41 Meanwhile, this aspect of Art. 8 ECHR is more or less an equivalent to the right to health not mentioned in the text of the convention. As far as this right to health is found in other international human rights instruments,42 it has also been used in order to found duties to protect against environmental harm.43 The human right to health also plays an important role in national jurisprudence. The German Federal Constitutional Court, for example, has developed its case law in environmental matters mainly on the basis of the duty to protect the physical integrity of every person.44 There is no serious doubt that the effects of global warming have a negative impact on the health of human beings. The rising number of heat waves is a grave menace especially for vulnerable persons, e.g. elderly people.45 Furthermore, the higher probability of thunder storms and floods increases the risk of injuries. It is quite obvious that these effects of global warming also menace human life. The 30 World Health Organisation has predicted that between 2030 and 2050, climate change will account for approximately additional 250,000 deaths each year.46 The right to life is protected by all human rights instruments. On the global level, Art. 6 ICCPR states that every human being has the inherent right to life. Art. 2 para 1 s. 1 ECHR reads: “Everyone’s right to life shall be protected by law.” In the jurisprudence of the European Court of Human Rights the right to life has been relevant as a duty to protect against the negative impact of human action as well as of natural disasters.47 Moreover, the right to property is relevant in climate change litigation. The right to 31 own property is mentioned in Art. 17 of the UN Declaration of Human Rights but not in the two international covenants. In consequence, the regional human rights instruments are mainly relevant.48 According to Art. 1 Protocol No 1 of the ECHR every natural or legal person is entitled to the peaceful enjoyment of his possessions. The European Court of Human Rights has recognized that this right may entail positive obligations, which may require the state to take the measures necessary to protect the right to property.49 But it has also stressed that the states enjoy a wide margin of 39 Cf Williams, The impact of climate change on indigenous people – the implications for the cultural, spiritual, economic and legal rights of indigenous people, The International Journal of Human Rights, Vol. 16 (2012), 648. 40 Cf Braig, supra (fn. 17), 305‐327; Lewis, supra (fn. 8), 17; Knox, supra (fn. 14), 221‐2. 41 Braig, supra (fn. 17), 278‐280. 42 Lewis, supra (fn. 8), 18‐21. 43 An overview is given by Shelton, Human Rights, Health and Environmental Protection: Linkages in Law and Practice, Human Rights & International Legal Discourse Vol. 1 (2007), 9. 44 The landmark case on the duty to protect against aircraft noise is summarized in English by Kommers, The Constitutional Jurisprudence of the Federal Republic of Germany, 2nd ed. 1997, 129‐131. 45 Bähr/Brunner/Casper/Lustig, KlimaSeniorinnen: lessons from the Swiss senior women’s case for future climate litigation, Journal of Human Rights and the Environment Vol. 9 (2018), 194 (201). 46 World Health Organisation, Climate change and health, 2018, available at https://www.who.int/ news-room/fact-sheets/detail/climate-change-and-health (27.12.2019). 47 Cf supra (fn. 29), 31. 48 Overview by Lewis, supra (fn. 8), 28‐31. 49 ECtHR, Allen and others v. United Kingdom, Application no. 5591/07, Judgement 6 October 2009, mn. 55.

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appreciation in cases involving environmental and planning issues.50 In that case only the value of property was affected. But the negative impact of global warming, mainly flooding and thunder storms, can cause harm to the substance of buildings and other property. Furthermore, the rise of the sea level endangers the very existence of land property close to the sea shore.

2. Access to courts The enforcement of environmental rights as well as of positive obligations derived from other human rights depends on national judicial structures and legal traditions. We find much variety in court organisation as well as in procedural law. In some constitutions, provisions on the enforcement of environmental rights are included,51 but often this is not a constitutional issue. Three classes of potential claimants can be distinguished: persons suffering individual injury, any person and associations. 33 In many jurisdictions, rights are only enforceable by persons individually affected by an act or an omission of a public authority. Whether the actual and future effects of climate change can be claimed in a way to fulfil this requirement is controversial and depends on the specific provisions of the pertinent legal order. 34 A prominent example of this rule is Art. 263 para 4 TFEU requiring that a person may institute proceedings only against an act addressed to that person or which is of direct and individual concern to them, or and against a regulatory act which is of direct concern to them and does not entail implementing measures. Based on that provision, the General Court of the European Union has declared inadmissible an application by 36 individuals of families from various countries in the European Union (Germany, France, Italy, Portugal and Romania) and the rest of the world (Kenya, Fiji), and an association governed by Swedish law, which represents young indigenous Sami. They claimed, inter alia, that the Court order the Council and the Parliament to adopt measures under the legislative package regarding greenhouse gas emissions requiring a reduction in greenhouse gas emissions by 2030 by at least 50 % to 60 % compared to the levels of 1990, or by such higher level of reduction as the Court shall deem appropriate. The Court found that the applicants had not established that the contested provisions of the legislative package infringed their fundamental rights and distinguished them individually from all other natural or legal persons concerned by those provisions just as in the case of the addressee.52 The fact that the effects of climate change may be different for one person than they are for another does not mean, according to the Court, that standing to bring an action against a measure of general application has to be recognized. It also denied that a more generous interpretation is required by Art. 47 of the EU Charter of Fundamental Rights. 35 In Switzerland, a group of elderly women addressed the Federal Administrative Court with the claim to force the national government to introduce new measures to combat global warming.53 Although they argued that elderly persons are under a higher risk of detrimental effects of heat waves, the Swiss court did not find sufficient scientific evidence for that claim, therefore denied that this group had a special interest and dismissed the application as inadmissible.54 In the same line of argument the German 32

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ECtHR, ibid, mn. 60. Cf Lewis, supra (fn. 8), 49‐52. 52 GC, Armando Ferrão Carvalho and others v. Parliament and Council, Case T‐330/18, Judgement of 8 May 2019, mns 49‐55. 53 The arguments of the claimants are presented by Bähr/Brunner/Casper/Lustig, supra (fn. 45), 194. 54 Bundesverwaltungsgericht (Federal Administrative Court), Application A-2992/2017, Judgement of 27 November 2018, available at https://www.bvger.ch/bvger/de/home/rechtsprechung/entscheiddatenbank-bvger.html (27.12.2019). 51

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Administrative Court of Berlin has decided that the claimants had not demonstrated that they were more affected by climate change than other people.55 Many legal orders have introduced a right of associations to enforce environmental law in the national courts. For the 47 European states having ratified the UNECE Convention on Access to Information, Public Participation in Decision-making and Access to Justice in Environmental Matters (Aarhus Convention), adopted in Aarhus, Denmark, on 25 June 1998, there is an international obligation to guarantee access to court for non-governmental organisations promoting environmental protection. National law may add specific requirements, e.g. a registration procedure, but any organisation meeting the conditions has to be deemed to have an interest for going to court in environmental cases. The implementation of the convention is monitored by a compliance committee. As in France there is no direct access of citizens to the Constitutional Court (Conseil Constitutionnel), a group of four associations and a small town have asked administrative courts to decide that government inaction violates the duty to act against climate change.56 Although no decision has yet been taken, there are strong doubts that the powers of the administrative judge are adequate for this far reaching purpose.57 In the famous case Urgenda v. The Netherlands standing is based on an even more generous clause in the Dutch Civil Code providing that a foundation or association with full legal capacity may bring an action to court pertaining to the protection of general interests or the collective interests of other persons, in so far as the foundation or association represents these general or collective interests based on the objectives formulated in its by-laws. The court of appeal accepted the argument that the foundation Urgenda is acting on behalf of the interests of the current generation of Dutch nationals and individuals subject to the state’s jurisdiction.58 Some jurisdictions even grant a right to everyone to challenge decisions in the field of environmental law. A right of any person to take action in this field is enshrined, for instance, in the constitutions of Bolivia, Ecuador, Kenya and Mongolia and recognized in several other countries in South America, Africa and Asia.59 Nevertheless in Europe such a broad access to courts is not recognized.

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3. Causation One of the major problems of most environmental cases is the establishment of a 40 causal link between the act or omissions the complaint is targeting and the impact on the human right invoked.60 Often, the causal connection of a degradation of environmental conditions and the harm individuals are suffering is not evident but based on an evaluation of probability.

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VG Berlin, Judgement of 31 October 2019, 10 K 412.18, juris. Notre Affaire à Tous et al., summary in English available at https://notreaffaireatous.org/wp-content/ uploads/2019/05/Brief-juridique-ADS-EN-1.pdf (27.12.2019). 57 Rotoullie, Le contentieux de la légalité, Revue française de droit administratif Vol. 35 (2019), 644. 58 Gerechtshof Den Haag, Application no. C/09/456689, Judgement 9 October 2018, mn. 37; English translation available at https://uitspraken.rechtspraak.nl/inziendocument?id=ECLI:NL:GHDHA:2018:2610&showbutton=true&keyword=200.178.245%2f01 (27.12.2019); the problem is discussed in detail by Spijkers, The Urgenda case: a successful example of public interest litigation for the protection of the environment?, in Voigt/Makuch (eds.), Courts and the Environment, 2018, 305 (309‐313). 59 Cf Lewis, supra (fn. 8), 50‐51; May/Daly, Judicial handbook on environmental constitutionalism, 2017, 133‐135. 60 Van Dyke, A Proposal to Introduce the Right to a Healthy Environment into the European Convention Regime, Virginia Environmental Law Journal Vol. 13 (1993/94), 323 (344). 56

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The European Court of Human Rights has argued in several cases involving the right to life that the causal connection between a given harm and a state’s action or inaction must be “likely”.61 In some cases concerning Art. 8 ECHR it has required that applicants produce reasonable and convincing evidence of the probability of the occurrence of a violation concerning him or her personally.62 In other cases, the court has used the precautionary principle in order to reduce the burden of proof.63 It is quite obvious that the court uses a flexible approach. In each case, the question of which level of risk is acceptable has to be answered. In that respect the importance of the rights invoked is relevant and thus in cases involving the duty to protect the right to life the level of certainty that harm will be caused may be lower than in those a violation of Art. 8 ECHR is claimed. 42 In climate change litigation the petitioners usually did not yet suffer personal harm, but they contend that there is a duty to adopt measures in order to prevent future violations of human rights. The consequences of global warming cannot be predicted in such a precise manner that it is possible to identify individuals who will certainly be victims. Accordingly, the claims depend on whether a court can be convinced that there is a relevant level of probability that the human rights invoked will be affected in the future. 43 The need for a clearly established link of causation also depends on what kind of petition is at stake. If procedural law allows a NGO or any person without individual concern to take action in court, there is no necessity to argue with the specific situation of the claimant. Whereas if it is required that the petitioner has to be individually concerned, a sufficient probability must be established that he or she will be affected in a foreseeable way. In the Swiss, the German as well as in the EU case, the courts decided that this had not been demonstrated.64 41

4. Scope of obligations All climate change litigation based on the concept of positive obligations has to address the problem of what kind of action can be required from national authorities. Usually courts are inclined to accept a wide margin of appreciation of elected bodies to select measures in order to protect human rights. Especially if these measures adversely affect other human rights by imposing duties on individuals or undertakings, the conflicting positions have to be balanced.65 Given the global and complex nature of climate change, this question of defining duties to act has many aspects. Is there a necessity of national action as global warming is caused by emissions all over the world? Are only measures to reduce emissions to be implemented or are alternatives to be accepted, e.g. the capture and storage of greenhouse gases or the promotion of carbon sinks inside or outside the country? What scope of reduction can be required? 45 The fact that climate change is a global phenomenon and no state alone can stop global warming has been used for the argument that individual human rights protection is not an appropriate means to cope with such an international problem.66 The question whether states have obligations to protect the rights of people living outside their 44

61 ECtHR, L.C.B. v. United Kingdom, Application no. 23413/94, Judgement 9 June 1998, mn. 38; ECtHR, Öneryildiz v. Turkey, supra (fn. 29), mn. 93; ECtHR, Budayeva v. Russia, supra (fn. 31), mn. 147. 62 Cf fn. 21. 63 ECtHR, Tatar v. Romania, supra (fn. 20), mn. 109; for Germany cf Kahl/Daebel, supra (fn. 11), 74. 64 Cf fn. 52, 54, 55. 65 Roschmann, Climate Change and Human Rights, in Ruppel/Roschmann/Ruppel-Schlichting (eds.), Climate Change: International Law and Global Governance, Vol. I, 2013, 203 (236‐240). 66 Wegener, Urgenda – Weltrettung per Gerichtsbeschluss?, Zeitschrift für Umweltrecht Vol. 30 (2019), 3 (11).

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borders is indeed very controversial.67 Nevertheless, this very fundamental objection has not been accepted by several national courts, because every state has a duty to protect the human rights of the people living in the respective country. The positive obligation entails without doubt that a state has to protect the rights of all people living within its jurisdiction. The fact that harm to the inhabitants is also caused by human action in other states does not qualify the duties of the home state. The general goal to keep global warming well below 2° C can only be reached if all states take action, as stated clearly in the Paris Agreement. Besides, also a smaller state cannot disregard the obligation to take precautionary measures by arguing that it makes only a minor contribution to all emissions.68 A major problem of climate change litigation is the definition of what kind of obligation a court can impose on national authorities. As there is not the one and only measure to stop global warming but a wide range of possible reactions, the question is whether a court can select the proper means a government has to introduce. The first question is whether human rights protection requires mitigation measures or if adaptation is sufficient. Without doubt, states have to take adaptation measures necessary to protect human rights if the effects of global warming are already harmful to the health, property or even the life of people living in that state. But this does not mean that mitigation is not required. In the Urgenda case, the courts clearly stated that only mitigation is appropriate to protect its citizens from the consequences of climate change to a limited level. “If the current greenhouse gas emissions continue in the same manner, global warming will take such a form that the costs of adaptation will become disproportionately high. Adaptation measures will therefore not be sufficient to protect citizens against the aforementioned consequences in the long term.”69 If mitigation measures are necessary, the next question is whether they are to be taken inside or outside the country where the petition is filed. Art. 6 of the Paris Agreement permits the use of internationally transferred mitigation outcomes. Therefore, states may use reductions in other countries to achieve nationally determined contributions under the agreement provided that it is authorized by the states involved. Nonetheless, it is evident that this option does not question the duty of all states to pursue a path that ensures achieving the net zero emission target necessary to reach the global ‘well below 2° C’ target.70 National mitigation efforts can target the reduction of emissions by regulations limiting the emission of greenhouse gases or by using new technologies to avoid that emissions reach the atmosphere or by increasing carbon sinks. In the Urgenda case the court argued that CO2 capture and storage techniques are not sufficiently developed and hence not likely to be applied in the short term and in time to reach short term reduction targets.71 It did not discuss the option to strengthen carbon sinks, maybe because this alternative was not introduced. At least in some countries a massive investment in new forests may help to reduce the greenhouse gas emissions.72 67

Knox, supra (fn. 14), 226; Hänni, supra (fn. 14), 16‐7. Rechtbank Den Haag, Application no. C/09/456689, Judgement 24 June 2015, no. 4.79; English translation available at https://uitspraken.rechtspraak.nl/inziendocument?id=ECLI:NL:RBDHA:2015:7196&showbutton=true&keyword=C%2f09%2f456689 (27.12.2019); Spijkers, supra (fn. 58), 321; Bähr/Brunner/Casper/Lustig, supra (fn. 45), 213; unclear Knox, supra (fn. 14), 227‐9. 69 Rechtbank Den Haag, supra (fn. 68), no. 4.75; cf also Gerechtshof Den Haag, supra (fn. 58), no. 59. 70 Bähr/Brunner/Casper/Lustig, supra (fn. 45), 207. 71 Rechtbank Den Haag, supra (fn. 68), no. 4.72. 72 Simonis, “Energieoption” plus “Waldoption”. Plädoyer für eine Doppelstrategie der Klimapolitik, Zeitschrift für Umweltpolitik & Umweltrecht Vol. 42 (2019), 358. 68

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If courts accept that human rights require national measures to reduce greenhouse gas emissions, they face the question of which scope of mitigation is necessary. In the Urgenda case, the District Court ordered “the State to limit the joint volume of Dutch annual greenhouse gas emissions, or have them limited, so that this volume will have reduced by at least 25 % at the end of 2020 compared to the level of the year 1990”.73 This ruling was upheld by the Court of Appeal. The District Court clarified that the reduction target can be based on the standard which according to the latest scientific knowledge and in the international climate policy is required for Annex I countries to meet the 2° C target.74 The postponement of mitigation efforts would lead to cumulation effects and therefore increase the risk of climate change hazards. Nonetheless the court saw insufficient grounds to compel the state to adopt a higher level than the minimum level of 25 %, without specifying these grounds. The result is thus based on the principle of fair distribution requiring that all states have to act according to their contribution to global emissions.75 The scope of the positive obligation to protect human rights is connected with the internationally agreed targets, based on scientific advice. 51 In the British Plan B case, the High Court upheld the decision by the Secretary of State for Business, Energy and Industrial Strategy not to revise the 2050 carbon target under the Climate Change Act 2008, which demands a reduction of 80 % compared to the emissions of 1990. The claimants relied on the rights conferred by Articles 2 and 8 of the ECHR, and by Article 1 of the First Protocol, both individually and in conjunction with Article 14 and submitted that the Secretary of State was in breach of his positive obligations to uphold the Claimants’ Convention rights. Justice Supperstone rejected this claim asserting that the executive had a wide discretion to assess the advantages and disadvantages of any particular course of action, not only domestically but as part of an evolving international discussion.76 50

5. Separation of powers The ultimate problem raised by all petitions based on the concept of positive obligations to protect human rights is the compatibility with the separation of powers. There is a lot of controversy on whether courts are entitled to order measures to be taken by the government or even by parliament. 53 Some petitioners have chosen the alternative to address the national executive. They claim that the government either has to take action based on existing legislation77 and/ or has the duty to introduce new legislation.78 In this scenario the courts have to decide on executive action which is not an extraordinary situation. Nevertheless the question remains whether a duty to make proposals to the parliament is an adequate means to protect human rights. 54 As especially measures to curb emissions by private undertakings or households will usually require legislation, petitions requiring action by a parliament raise difficult questions of the relation between independent judges and elected politicians. However, it is obvious that there is no universal model of the separation of powers, but that all 52

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Rechtbank Den Haag, supra (fn. 68), no. 5.1. Ibid., no. 4.83‐86. 75 Hänni, supra (fn. 14), 15. 76 High Court of England and Wales, Application no. CO/16/2018, Judgement 20 July 2018, mn. 49, available at http://www.bailii.org/ew/cases/EWHC/Admin/2018/1892.html (27.12.2019). 77 Cf the British Plan B case, ibid., the Irish case Friends of the Irish Environment https://www. friendsoftheirishenvironment.org/climate-case (27.12.2019), or the French case Notre Affaire à Tous et al., supra (fn. 56). 78 Cf the Swiss KlimaSeniorinnen case, supra (fn. 54) and the German Greenpeace case, supra (fn. 55). 74

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constitutions have to define how they organise the relation between the main institutions. Especially the relation between the legislator and the courts is a very controversial topic with very diverse solutions. Constitutional courts have been created in a majority of European countries but some of the old democracies in North Western Europe do not accept this institution.79 If there is a constitutional court, the ways to file a petition and the powers of the courts are far from uniform. Therefore, only some general points can be discussed here. Whether an action against a national parliament is admissible depends on national 55 procedural law. In Germany, for example, independent from the case in the Administrative Court of Berlin also a constitutional complaint has been lodged with the aim to declare the existing legislation insufficient to avoid harm to human rights by global warming.80 While the Federal Constitutional Court has acknowledged in many decisions that human rights may include a duty to enact new legislation, no petition bringing forward this claim in the field of environmental law has ever been successful. The existing legislation was always found to be sufficient and therefore within the margin of appreciation of the parliament.81 In the Urgenda case, the court discarded the warning of the government not to 56 exceed its powers based on the trias politica with the argument that it only implements the duties of the European Convention on Human Rights, which according to the Dutch constitution is above the national law.82 For other constitutions not accepting the primacy of international law the situation is more complicated. The margin of appreciation which is recognized as a fundamental feature of positive 57 obligations in the field of environmental law can be respected if the courts do not order what kind of legislative or administrative action must be taken. The claim of the petitioners in several national cases aimed at a determination that existing measures were not sufficient. No court was asked to act as a legislator but to declare that action already implemented is not enough to effectively protect human rights. Such an assessment leaves the legislator or the government enough choice between several options how to curb emissions, e.g. by the prohibition of certain carbon-based techniques, carbon taxes, new emission trade schemes or subsidies for carbon free technologies.

V. Conclusion The number of cases on human rights obligations to work against global warming has 58 been increasing enormously in the past few years. Environmental organisations but also individuals in many countries are approaching administrative, civil or constitutional courts claiming that states violate the duty to protect their citizens from harm caused by climate change. Whereas the concept that states are obliged to protect human rights against adverse effects of private action is accepted in most of the jurisdictions, the definition of the scope of duties is very controversial. Although only few of the petitions in national courts are successful, climate cases 59 always aim at the public debate as well. As an example of strategic litigation petitioners in climate cases seek to influence not only the judges but also the national political

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Brief overview by Weber, European Constitutions Compared, 2019, 167‐172. Summary in English at http://climatecasechart.com/non-us-case/friends-of-the-earth-germany-association-of-solar-supporters-and-others-v-germany/ (27.12.2019). 81 Kahl/Daebel, supra (fn. 11), 75. 82 Gerechtshof Den Haag, supra (fn. 58), no. 69; confirmed by the Hoge Raad, supra (fn. 38). 80

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forum.83 Even if a case is lost, it may have influence on decisions in government or in parliament because it increases public pressure to take action. 60 It will take some time until final decisions by highest national courts or regional human rights courts will be delivered. If positive obligations of national authorities to act against global warming can be successfully claimed, courts will be able to speed up mitigation measures. It is clear, though, that the unprecedented challenge of climate change will not be met if only some states with courageous (others will say activist) judges implement the necessary measures. 61 In the end, the global effects of climate change require joint action on the global level. Therefore, more international cooperation based on solidarity is needed.84 Some scientists even fear that the unimpeded rise of temperatures in the atmosphere and in the sea could endanger the survival of mankind.85 Therefore it should be clear that the protection of human rights is not a local problem, but requires completely new patterns of international regulation.86 83 Peel/Osofsky, Litigation as a Climate Regulatory Tool, in Voigt (ed.), International Judicial Practice on the Environment: Questions of Legitimacy, 2019, 311; Graser, Strategic Litigation – oder: Was man mit der Dritten Gewalt sonst noch so anfangen kann, Rechtswissenschaft Vol. 10 (2019), 371. 84 Cullet, supra (fn. 4), 511‐514. 85 Cf, e.g., Spratt/Dunlop, Existential climate-related security risk, 2019, available at https://docs. wixstatic.com/ugd/148cb0_b2c0c79dc4344b279bcf2365336ff23b.pdf (27.12.2019). 86 Proposals are made, e.g., by Abbott, Strengthening the Transnational Regime Complex for Climate Change, Transnational Environmental Law Vol. 3 (2014), 55; Groß, Postnationale Demokratie – Gibt es ein Menschenrecht auf transnationale Selbstbestimmung?, Rechtswissenschaft Vol. 2 (2011), 125.

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PART 2 PROCEDURAL ISSUES AND CONFLICT OF LAWS E. Arbitration proceedings Bibliography: Blackaby/Partasides QC/Redfern/Hunter, Redfern and Hunter on International Arbitration, 6th ed., Oxford University Press, 2015; Boom/Richards/Leonard, Climate Justice: The international momentum towards climate litigation, Heinrich Böll Stiftung & Climate Justice Programme 2016, https:// www.boell.de/en/2016/11/15/climate-justice-international-momentum-towards-climate-litigation; Born, International Commercial Arbitration, 2nd ed., Kluwer Law International, 2014; Brown, International, Mixed and Private Disputes Arising under the Kyoto Protocol, Journal of International Dispute Settlement, Vol. 1, No. 2 2010, 447–473; Carlarne, Rethinking a Failing Framework: Adaptation and Institutional Rebirth for the Global Climate Change Regime, 25 Geo. Int’l Envtl. L. Rev. 1 2013; Ellis, Has International Law Outgrown Trail Smelter?, in: Bratspies/Miller (eds.), Transboundary Harm in International Law: Lessons from the Trail Smelter Arbitration, Cambridge University Press, 2006, pp. 56–65; European Commission, A future multilateral investment court, Memo/16/4350 2016, https://ec.europa.eu/ commission/presscorner/detail/en/MEMO_16_4350; Garimella, Environmental Dispute Resolution, ADR Methods and the PCA Arbitration Rules, in: ILI Law Review, Summer 2016, 199–222; Gerrard, What Litigation of a Climate Nuisance Suit Might Look Like, Sustainable Development Law & Policy, Vol. 12, Issue 2 2012, 12–14, 56; Hay, Winds of Change? Confidentiality in International Commercial Arbitration, in: Gonzalez-Bueno (ed.), in: 40 under 40 International Arbitration, Editorial Dickinson, 2018, p. 211; Hesse, Schiedsgerichtsbarkeit in der Investitionsgüterindustrie – eine empirische Untersuchung, in: Briner (ed.), Law of international business and dispute settlement in the 21st century, Liber Amicorum for KarlHeinz Böckstiegel, Heymanns 2001, p. 277; ICC Commission Report 2019, Resolving Climate Change Related Disputes through Arbitration and ADR, p. 59; International Bar Association, Achieving Justice and Human Rights in an Era of Climate Disruption, Climate Change Justice and Human Rights Task Force Report 2014, pp. 14, 139, 145; Kalas/Herwig, Dispute Resolution under the Kyoto Protocol, Ecology Law Quarterly 27 2000, 53; Levine, Adopting and Adapting Arbitration for Climate Change Related Disputes, The Experience of the Permanent Court of Arbitration, ICC, Dispute Resolution and Climate Change 2017, 27; Levine, Climate Change Disputes: The PCA, The Paris Agreement and Prospects for future Arbitrations, Transnational Dispute Management, Vol 14, Issue 1 2017; Lew/Mistelis/Kröll, Comparative International Commercial Arbitration, Kluwer Law International, 2003; Luhmann/Arens, Von den flexiblen Mechanismen des Kyoto Protokolls zu den kooperativen Ansätzen des Übereinkommens von Paris, Zeitschrift für Umweltpolitik und Umweltrecht, Sonderausgabe zur Pariser UN-Klimakonferenz, Jg. 39 2016, 95–101; Meshel, Optional Rules for Arbitration of Disputes relating to Natural Resources and/or the Environment, Oxford Public International Law 2016, https://opil.ouplaw.com/view/ 10.1093/law-mpeipro/e2810.013.2810/law-mpeipro-e2810; Miles, Research Handbook on Environment and Investment Law, Edward Elgar, 2019; Mistelis, International Arbitration – Corporate Attitudes and Practices – 12 Perceptions Tested: Myths, Data and Analysis Research Report, 15 Am Rev. Int’l Arb. 525 (2004); Peppers, Is climate change too political for courts?, Georgetown Environmental Law Review March 31st 2019; Shreyan, Transboundary Water Disputes, ETH Zurich Research Collection 2013, https://doi. org/10.3929/ethz-a-009989936; Vespa, An Alternative to an International Environmental Court – The PCA’s Optional Arbitration Rules for Natural Resources and/or the Environment, The Law and Practice of International Courts and Tribunals 2003, p. 295; Wirth, The Trail Smelter Dispute: Canadians and Americans confront transboundary pollution, Environmental History Volume 1, Issue 2 1996, 34–51; Wolff, Grundzüge des Schiedsverfahrensrecht, JuS 2008, 108.

Contents I. Introduction ..................................................................................................... II. Climate change disputes................................................................................ 1. Disputes resulting from material damages ........................................... 2. Disputes over natural resources .............................................................. 3. Disputes resulting from international climate treaties....................... 4. Disputes resulting from transformation of the economy..................

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Part 2. Procedural issues and Conflict of Laws 5. Climate finance disputes ........................................................................... 6. Corporate disputes ..................................................................................... III. Arbitration proceedings................................................................................. 1. Arbitration law ............................................................................................ 2. Enforceability............................................................................................... 3. Arbitration agreement ............................................................................... 4. Confidentiality............................................................................................. 5. Flexibility of proceedings .......................................................................... 6. Selection of arbitrators .............................................................................. 7. Involvement of third parties .................................................................... 8. Involvement of states................................................................................. 9. Applicable law ............................................................................................. 10. Claims based on tort.................................................................................. IV. Suitability of arbitration proceedings for climate change disputes.............................................................................................................. 1. Political and public law claims................................................................ 2. Claims for damages and for specific performance against companies..................................................................................................... 3. Disputes over natural resources .............................................................. a) Trail Smelter arbitration...................................................................... b) Indus Waters Kishenganga arbitration ............................................ 4. Disputes arising from international climate protection treaties ...... a) UNFCCC................................................................................................. b) Kyoto Protocol....................................................................................... c) Paris Agreement .................................................................................... 5. Disputes resulting from the implementation of international climate treaties............................................................................................. a) Kyoto Protocol....................................................................................... b) Paris Agreement .................................................................................... 6. Disputes due to transformation towards Green economy................ 7. Disputes arising from climate finance ................................................... a) Adaptation Fund ................................................................................... b) Green Climate Fund............................................................................. 8. Corporate disputes ..................................................................................... V. Arbitral institutions and climate change ................................................... 1. Permanent Court of Arbitration, The Hague ...................................... 2. International Court of Arbitration of the ICC, Paris......................... a) Securing relevant expertise.................................................................. b) Faster and more effective procedures............................................... c) Integration of climate change policy, commitments or laws...... d) Transparency.......................................................................................... e) Third party involvement ..................................................................... VI. Summary...........................................................................................................

9 10 11 13 15 19 20 24 25 27 29 30 31 32 33 36 40 42 44 45 45 50 53 56 57 64 67 70 72 78 88 93 94 99 105 106 107 108 109 110

I. Introduction 1

Climate change will lead to disputes and will trigger litigation. This is the topic of this book. However, climate change will also lead to a rise of arbitration proceedings. Arbitration is a globally recognised and well established way of resolving disputes and an alternative form of dispute resolution (ADR). It is the most important alternative to state court litigation and enables parties to resolve their disputes with binding effect and without consensus on the matter. It is therefore evident that also arbitration will play an important role in resolving climate change disputes.

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The following chapter will examine the following questions: 2 – Part III: How does arbitration work and what procedural options are provided by arbitration to resolve disputes? – Part IV: Is arbitration suitable for resolving climate change disputes? – Part V: How do arbitral institutions react to the expected climate change disputes?

II. Climate change disputes Climate Change disputes concern a wide range of issues. Some of the disputes are a 3 direct result of climate change, others arise indirectly therefrom. The main disputes are to be expected from the following constellations:

1. Disputes resulting from material damages Climate change is causing direct material damage (through heat, drought, rising sea 4 levels, extreme weather events, etc.). Affected parties include individuals, companies, cities and countries. These parties often ask themselves whether there is anyone who can be held liable for the damage and whose conduct can be influenced by means of law. Today, a large number of court cases are pending to hold the (alleged) contributors to climate change accountable or oblige them to change their conduct.

2. Disputes over natural resources Climate change reduces the access to and the availability of intact natural resources 5 (water, arable land, clean air, etc.). The often existential question of having access to intact natural resources causes disputes.

3. Disputes resulting from international climate treaties The UN Member States have undertaken to combat climate change through interna- 6 tional treaties. The most important treaties are the United Nations Framework Convention on Climate Change (UNFCCC)1, the Kyoto Protocol2 and the Paris Agreement3. Some of these treaties set out a state’s duty to act. Therefore, disputes can and will arise from these treaties. Furthermore, these international treaties expect private parties and non-governmen- 7 tal organisations (NGOs) to play a crucial role in fulfilling the treaties’ objectives. The involvement and investment from the private sector happens through contractual relationships between various different players. Contractual disputes over liability for non-performance of these contracts may and will result.

4. Disputes resulting from transformation of the economy A political process has begun to transform the economy towards CO2-neutrality. 8 This transformation will produce winners and losers due to changes in the legal framework, increased regulation and political action. A huge number of contracts will be concluded amongst companies and other economic players in order to re-organise 1 Cf https://unfccc.int/files/essential_background/background_publications_htmlpdf/application/pdf/conveng.pdf. 2 Cf https://unfccc.int/resource/docs/convkp/kpeng.pdf. 3 Cf https://unfccc.int/files/essential_background/convention/application/pdf/english_paris_agreement. pdf.

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the various business-models towards a sustainable carbon free business. Disputes may and will be the result.

5. Climate finance disputes 9

Transforming the economy and improving climate protection also requires massive financial investments. We are currently observing one of the largest investment programmes of all times, in which very substantial cash flows are being moved, distributed and invested to counteract climate change. Contracts are being concluded to furnish, collateralise and distribute cash flows. From all these contracts disputes may arise.

6. Corporate disputes 10

Finally, there are numerous corporate disputes by which shareholders or other stakeholders try to influence the strategy and management of a company, hold the management board liable for climate-damaging decisions or merely obtain information associated with climate change. This chapter will examine, whether arbitration is a suitable option for the resolution of these disputes.

III. Arbitration proceedings In disputes, parties are generally free to come to a mutual agreement by way of negotiation, mediation, conciliation and other forms of dispute resolution. However, if a mutual agreement cannot be reached, state jurisdiction is often the only way to obtain a binding and enforceable decision. As an alternative, most national procedural laws allow for private arbitration if the parties have agreed so. 12 There are two main areas in which arbitration is used at present: – Arbitration is very extensively used in commercial disputes between companies and other private parties.4 In commercial arbitration, the parties decide to have their legal dispute resolved by a private arbitral tribunal instead of state courts. The parties may individually define the rules and framework conditions of these proceedings. Such arbitration proceedings take place both in a national setting as well as in the context of an increasingly globalised economy. Arbitration tends to be the preferred way of resolving international trade disputes. According to estimates5, 70 % to 90 % of international contracts contain arbitration clauses. – Another important area in which arbitration is used are international treaties between states. Within this group investment treaties (BITs/MITs) are the main scope of application (Investor-State-Disputes). Such investment arbitrations have been explained in detail in the previous chapter. However, arbitration agreements are often also contained in International Environmental and Climate Treaties. Such arbitration agreements will be discussed in more detail below. 11

Cf Born, International Commercial Arbitration, 2nd ed., Kluwer Law International, 2014, p. 93. Cf School of International Arbitration at Queen Mary, University of London: 2018 International Arbitration Survey: The Evolution of International Arbitration, p. 5: The survey (based on 922 questionnaire responses and 142 in-person or telephone interviews) found that 97 % of respondents indicate that international arbitration is their preferred method of dispute resolution; Mistelis, 15 Am. Rev. Int’l Arb., (2004), 525 (538 et seq.); Hesse, in: Briner, Robert (ed.), Liber Amicorum Karl-Heinz Böckstiegel, 2001, 277 (280); Wolff, JuS 2008, 108. 4 5

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Before going into detail on the extent to which climate change disputes are suitable for arbitration, the legal basis for (commercial) arbitration proceedings should briefly be described:

1. Arbitration law Arbitration proceedings are private proceedings which are (largely) outside state 13 jurisdiction.6 Most of the national civil procedural laws allow such proceedings to be carried out as an alternative to state court jurisdiction and contain specific provisions on implementing arbitration proceedings. Such procedural laws are often based on a model law specifically drawn up for this purpose in 1985, namely the UNCITRAL Model Law on International Commercial Arbitration.7 As a general rule, any proprietary claim may be the subject of an arbitration agreement. 14 Arbitration agreements on non-proprietary claims are only admissible if the parties are entitled to settle on the subject of the dispute.8 In principle, arbitration proceedings are permitted in situations in which the parties do have free rein in their legal relationships. This right is a direct expression of the principle of private autonomy.9

2. Enforceability If arbitration proceedings are permissible and if the proceedings are in line with the 15 minimum standards required, the arbitral award will be legally binding between the parties and will produce the same effect as a state court judgment.10 The equivalence between an arbitral award and a state court judgment initially means 16 that the arbitral award can be enforced in the country in which it is made in the same way as a national court judgment.11 It is also possible for the arbitral award to be enforced in a country other than the one in which arbitration proceedings were held.12 In 1958, the United Nations concluded the Convention on the Recognition and Enforcement of Foreign Arbitral Awards.13 146 countries have joined the New York Convention to date.14 No other international treaty or legal source has influenced the success of arbitration proceedings in the same manner as the New York Convention. Under the New York Convention the parties agreed to enforce a foreign arbitral award if the country in which it was issued has agreed for its part to enforce arbitral awards from the respective other country (reciprocity clause).15 Under Art. V New York Convention, enforcement of an arbitral award may only be refused if there is no valid arbitration agreement, the arbitral award goes beyond the scope of the arbitration 6

Cf Born, supra (fn. 4), 89 et seq. According to the UNCITRAL Secretariat, legislation based on the Model Law has been adopted in 80 States in a total of 111 jurisdictions; cf https://uncitral.un.org/en/texts/arbitration/modellaw/commercial_ arbitration/status. 8 Typical nonarbitral subjects are, e.g. disputes involving criminal matters, trade sanctions, consumer claims, labor or employment grievances, cf Born, , supra (fn. 4), 944 et seq. 9 Cf Blackaby/Partsaides QC/Redfern/Hunter, Redfern and Hunter on International Arbitration, 6th ed., Oxford University Press, 2015, p. 71. 10 Cf UNCITRAL Model Law on International Commercial Arbitration, Explanatory Note by the UNCITRAL secretariat, p. 36: Under Article 35 (1) Model Law any arbitral award, irrespective of the country in which it was made, shall be recognized as binding and enforceable, subject to the provisions of Article 35 (2) and of Article 36 of the Model Law. 11 Ibid. 12 Redfern/Hunter, supra (fn. 9), 610 (in general on recognition and enforcement of arbitral awards: 605 et seq.). 13 Cf https://www.uncitral.org/pdf/english/texts/arbitration/NY-conv/New-York-Convention-E.pdf. 14 Cf http://www.newyorkconvention.org/list+of+contracting+states. 15 Cf The “Objectives” and Art. 1 of the New York Convention. 7

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agreement, the composition of the arbitral tribunal was not in accordance with the agreement or law, the agreed arbitration proceedings were not complied with, the arbitral award has already been annulled in a country where the award was made, or if the arbitral award breaches the public policy of the state of enforcement. 17 On the other hand, there are no grounds for refusal of enforcement if the law is incorrectly applied or the judgement contains errors of substance. Therefore, a state court does not review the content of the arbitral award. 18 The importance of the New York Convention becomes especially clear if one compares the enforcement options of foreign state court judgments. Enforcing foreign state court judgments is often only possible under restricted conditions. Enforcing foreign court judgments presupposes that bilateral agreements exist or that reciprocity is guaranteed. However, as this is frequently not the case, it is often impossible to enforce state court judgments abroad.16 Thus, the enforceability of arbitral awards is a key success factor for arbitration worldwide.

3. Arbitration agreement 19

All arbitration proceedings require that the parties have agreed on arbitration or are obliged on the basis of other standards to resolve disputes with regard to a specific legal relationship before an arbitral tribunal. The basis for arbitration proceedings is thus always an arbitration agreement. Certain form requirements must be observed. Only a valid arbitration agreement can establish the jurisdiction of an arbitral tribunal.17 Enforcement under an arbitral award also requires a valid arbitration agreement, pursuant to Art. IV 1. (b) in conjunction with Art. II New York Convention. However, an arbitration agreement may also be specified in the articles of association of a company to which all the shareholders (and the company) are bound, or in the bylaws of associations, organisations and other bodies. In such cases, the articles of association or bylaws form the necessary contractual basis for conducting arbitration proceedings.

4. Confidentiality Another important factor which contributes to the success of arbitration is the confidentiality of the proceedings. Not all arbitration rules specify absolute confidentiality. However, it is well-settled that generally all those involved in the proceedings are required to maintain confidentiality and arbitral awards are not published.18 In most cases, the proceedings are not disclosed to the public. This is what many parties in commerce appreciate as they can conduct commercial disputes in arbitration proceedings without the public or their competitors getting knowledge about any such disputes and its outcome. 21 However, the confidentiality of arbitration proceedings has recently drawn criticism. The question has been raised whether it is appropriate in today’s world to conduct “backroom” proceedings without any public supervision.19 This discussion is not so 20

16 However, this is not the case within the European Union. A state court judgment from another EU Member State has generally been easier to enforce than a foreign arbitral award since the EU Regulation on Jurisdiction and the Recognition and Enforcements of Judgments entered into force are not as extensive as the grounds for refusing recognition under the New York Convention (cf Art. 45 Brussels I Regulation (Recast)). 17 Cf Redfern/Hunter, supra (fn. 9), 75 et seq. 18 Cf Born, supra (fn. 4), 2787. 19 Cf Hay, in: Gonzalez-Bueno (ed.), 40 under 40 International Arbitration, 2018, (211).

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much triggered by commercial disputes which are generally unproblematic as far as confidentiality is concerned and which are the expression of private autonomy. However, a different view can be taken if states or state-owned companies are 22 involved in the proceedings. In this case, public interests are at issue and taxpayers’ money is often involved. Therefore, the question has been raised as to whether investor state disputes, in which the state may be ordered to pay compensation on the basis of political decisions, may be decided by a private arbitral tribunal away from public scrutiny.20 The International Centre for Settlement of Investment Disputes (ICSID) has reacted to this and set up wide-reaching rules on transparency.21 Under UNCITRAL’s rules on transparency, all investment protection proceedings ought to be public today. However, ICSID still assumes that the ICSID convention and arbitration rules do not include any general assumption of confidentiality or transparency applicable to all parties. Instead, the parties can agree on the degree of confidentiality or transparency to apply to their proceedings.22 In the Mauritius Convention on Transparency23, 22 states have undertaken to apply UNCITRAL’s rules on transparency.24 As an alternative, in more recent investment treaties international tribunals have been 23 especially set up to resolve disputes. The Comprehensive Economic and Trade Agreement between the EU and Canada (CETA) adopted in 2016 provides for a permanent investment and appellate tribunal.25 The idea is to transform the bilateral investment tribunal at a later date into an investment court where proceedings relating to other free trade agreements can be conducted, for example the EU-Vietnam free trade agreement.26 It will become apparent that this transparency discussion is relevant and must also be considered in the context of climate change disputes.27

5. Flexibility of proceedings Arbitration proceedings also offer a high degree of flexibility in structuring proceed- 24 ings and give the parties greater control and autonomy over the dispute than state court proceedings.28 For parties from different cultures, jurisdictions or states, it is often advantageous to be able to freely determine the place of the proceedings, the language and the rules of procedure. This can create neutrality which is often not possible in state court proceedings. Arbitration proceedings have also established numerous rules and best practises to balance the legal and cultural differences between different jurisdictions. For example, rules on how to take evidence in international arbitration proceedings have been established as a compromise between the different jurisdictions.29

20

Cf Born, supra (fn. 4), 2828. UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration (New York, 2014). 22 Cf https://icsid.worldbank.org/en/Pages/process/Confidentiality-and-Transparency.aspx. 23 United Nations Convention on Transparency in Treaty-based Investor-State Arbitration (New York, 2014). 24 Cf https://treaties.un.org/Pages/ViewDetails.aspx?src=TREATY&mtdsg_no=XXII-3&chapter=22&clang=_en;to date (March 2020), only five states have ratified the convention, however. 25 Cf https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:22017A0114(01). 26 European Commission, A future multilateral investment court, memo available at: https://ec.europa. eu/commission/presscorner/detail/en/MEMO_16_4350. 27 Cf International Bar Association, Climate Change Justice and Human Rights Task Force Report, 2014, (14, 145). 28 Cf Born, supra (fn. 4), 84 et seq. 29 For example the IBA Rules on the Taking of Evidence in International Arbitration and more recently the Rules on the efficient conduct of proceedings in international arbitration (Prague Rules, 2018). 21

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6. Selection of arbitrators In arbitration proceedings the parties themselves may determine and choose the arbitrators.30 The parties may also decide whether an individual arbitrator or a threemember arbitral tribunal (or even five-member arbitral tribunal) is to decide the dispute. In the very common three-member tribunal, arbitrators are generally selected as follows: the claimant appoints an arbitrator, then the defendant, and finally these two arbitrators agree on a presiding judge. This guarantees that each party has at least one arbitrator at the tribunal who it trusts and who it has chosen.31 26 Freedom to choose an arbitrator also enables the parties to get the expertise at court which is required for the respective dispute. This is an important factor which may also be of importance with respect to climate change disputes. 25

7. Involvement of third parties It is much more difficult to involve third parties in arbitration proceedings than in state court proceedings.32 Involving other parties in ongoing proceedings before state courts is relatively unproblematic. In Germany, for example, this is possible by giving third-party notice pursuant to section 72 et seq. Code of Civil Procedure, by intervention by a third party pursuant to section 66 et seq. Code of Civil Procedure or by a third-party counterclaim. In arbitration proceedings, however, the inclusion of third parties is only possible with the consent of all the parties involved, in particular the third party to be involved. In recent years, all the major arbitration institutions have tried to open their arbitration rules in such ways as to facilitate the involvement of third-parties and so-called multi-party arbitration.33 However, the main problem in involving third parties is the fact that each party in arbitration proceedings must basically have the right to select its own arbitrator. Thus, if an arbitral tribunal has already been constituted, another party can only be involved if this party waives its right to appoint its own arbitrator. In practice, this does not happen very often. 28 Another difficulty encountered in multi-party arbitration is that there must be one arbitration agreement for all the parties involved, which gives the same arbitral tribunal competence in the matter. This is generally only the case if all the parties involved are subject to a uniform contractual provision and have concluded the same arbitration agreement with each another. If there are legal disputes from different contracts, this is usually not the case. Thus, despite the efforts of arbitral institutions to open up proceedings for third parties, it is still one of the main shortcomings of arbitration. 27

8. Involvement of states 29

Involvement of state parties in arbitrations is common and possible. Arbitration proceedings provide the opportunity to settle disputes where state parties are involved. Also, when a national government or agency is a party to arbitration against a private

30

Cf Redfern/Hunter, supra (fn. 9), 21 et seq. Nevertheless, arbitrators must be independent and impartial. If this is not the case, an arbitrator may be rejected and in the event of any doubt an arbitral award may be annulled, cf Article 34(2)(iv) of the UNCITRAL Model Law. 32 To Third Parties in the Arbitration Agreement, cf Redfern/Hunter, supra (fn. 9), 85–92. 33 E.g. Arts. 7–10 ICC Rules of Arbitration, Art. 22 of the LCIA Arbitration Rules, Arts. 27, 29 HKIAC Administered Arbitration Rules. 31

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entity, it cannot invoke sovereign privileges and immunities. This is a very important factor when considering whether arbitration is suitable for climate change disputes.34

9. Applicable law In arbitration proceedings the parties are free to choose the applicable law. Arbitra- 30 tion tribunals are bound by the law which the parties have agreed on. Increasingly, national and international legislation is adopted in relation to climate change issues. Although the consent about the applicable law will be influenced by the respective bargaining power of the parties, the parties may agree that international law is applicable and that the disputes shall be decided on this basis.

10. Claims based on tort A difficulty with arbitration is dealing with claims based on tort. As already 31 mentioned, an arbitration agreement must exist for arbitration proceedings to be carried out. If claims are exclusively based on tortious acts or on statutory claims, the parties are usually not connected by any contractual relationship which would enable arbitration proceedings to go ahead.

IV. Suitability of arbitration proceedings for climate change disputes To what extent arbitration proceedings will play a role in climate change disputes 32 must be examined with regard to the respective matter in disputes. According to the above, it is clear that arbitration proceedings can only be considered if an arbitration agreement has been concluded between the parties or the parties subsequently agree to arbitration proceedings.

1. Political and public law claims There is a large number of lawsuits pending in which individuals, environmental 33 associations or public pressure groups file actions against states or governments to force them to do more against climate change and/or to implement or enforce (political) emission reduction targets. The most prominent cases in this respect are the Urgenda case in the Netherlands35, 34 the Juliana case in the U.S.36 and the Peoples Climate Case before the European court37. Hundreds of similar cases are pending all over the world. In most of these lawsuits, the claimants refer to constitutional and human rights which would oblige the defendant states to do more to protect their citizens. In other cases, the claimants refer to the fact that states are politically or legally obliged to achieve certain emission reduction targets but have failed to do so. All of these lawsuits are currently being conducted before state courts or international 35 courts. It is not expected that much will change in the future. If claimants wish to refer to constitutional rights or wish to make states responsible for political or legislative 34

Cf Kalas/Herwig, Ecology Law Quarterly 27, 2000, 53. Supreme Court of the Netherlands, The State of the Netherlands v Stichting Urgenda ECLI:NL: HR:2019:2007, Hoge Raad, 19/00135. 36 U.S. Supreme Court, Juliana et al. v United States of America et al, No. 18-36082, D.C. No. 6:15-cv01517-AA. 37 European General Court, Armando Carvalho and others v European Parliament and European Commission, T-330/18. 35

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action, there is no arbitration agreement and no possibility of arbitration for such claims. So far, arbitration is thus not relevant to this very large category of climate lawsuits. This is, apart from the already mentioned reasons, also due to the fact that the claimants in this type of lawsuits seem to seek the public fora as means of climate activism.

2. Claims for damages and for specific performance against companies The same players bringing “political” or public law actions against states are also involved in bringing actions against companies. Companies, if they are seen to be contributing to climate change, are sued in many ways by individual persons, environmental associations and other interest groups.38 This group of claimants is (in particular in the U.S.) supplemented by cities, municipalities and federal states.39 37 These claims seek – court orders or injunctions to limit greenhouse gas emissions of defendants (emission reduction disputes), – compensation for damages suffered by the claimant due to the companies’ climatedamaging emissions, – compensation for future damages which will arise if emissions are not reduced, – damages caused by pollution as the result of failure to adapt to climate change, – reimbursement of expenses for climate change measures which have become necessary owing to the companies’ negative impact on climate. 38 These actions are also not suitable for dispute resolution before an arbitral tribunal. In such cases normally no arbitration agreement has been drawn up between the claimants and the defendant company. The criteria for the asserted claims are often based on tort or public international law and do not result from contractual relationships which could possibly contain arbitration agreements. Thus, there is generally no basis for arbitration proceedings. 39 Furthermore, claimants often have an interest in generating publicity. Often there is only little chance such actions brought against companies will be successful due to many legal challenges of these claims.40 Therefore, claimants are not predominantly interested in winning the lawsuit. They often seek to exert public pressure on companies. Public actions put the companies’ reputation at risk and defendant companies may have to act even if claimants do not have any legally enforceable claim to make. Therefore, publicity is often a key factor in these proceedings and claimants are not interested in confidentiality and will generally not agree to arbitration proceedings being conducted. 36

3. Disputes over natural resources 40

As shown above, climate change results in a reduction of and a threat to intact natural resources. If there are disputes over natural resources or pollution of the environment between states, it is conceivable that the claimant state may base its claim on international (environmental) treaties which contain arbitration clauses. As will be 38 OLG Hamm, Lliuya v RWE AG, 5 U 15/17; Hague Court of Appeals, Friends of the Earth Netherlands/Milieudefensie v Royal Dutch Shell, File no. 90046903; San Francisco County Superior Courts, Pacific Coast Federation of Fishermen’s Association, Inc. v Chevron Corp., Case No. CGC-18-571285. 39 E.g., U.S. Court of Appeals for the Second Circuit, City of New York v BP p.l.c., Case No. 18-2188. 40 E.g., causation, climate attribution, climate responsibility, separation of powers, locus standi of claimants, etc.; cf Gerrard, Sustainable Development Law & Policy, Vol. 12, Issue 2, 2012, 12–14, 56; Peppers, Is Climate change Too Political for Courts?, Georgetown Environmental Law Review, 31 March 2019; Boom/Richards/Leonard, Climate Justice: The international momentum towards climate litigation, Heinrich Böll Stiftung & Climate Justice Programme 2016.

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shown in more detail below, the UNFCCC, the Kyoto Protocol and the Paris Agreement provide the possibility of arbitration. However, corresponding arbitration agreements have not yet been brought into force. Nevertheless, inter-state disputes concerning environmental disputes and disputes over natural resources have been often conducted before arbitral tribunals.41 Two of the most prominent cases to do with environmental pollution are the 41 following, even if these were not triggered by climate change: a) Trail Smelter arbitration. The Trail Smelter arbitration proceedings dating back 42 to 1938 and 1941 was a dispute between the USA and Canada on the pollution of tracts of land as a result of sulphur emissions. This air pollution was caused by a smelting plant which was located in Canada, on the border to the USA. Originally, a dispute broke out between the smelting plant and farmers or landowners from the neighbouring USA who requested support from the American state which took on the dispute because of its transnational character.42 Canada and the USA employed an arbitral tribunal to resolve the dispute and decide 43 whether compensation would be paid for damage caused by pollution.43 The tribunal decided that Canada would have to pay compensation to the USA and that there was also an obligation to reduce pollution. This was the first decision which recognised the international liability for damage suffered by another country even if at that time there was no treaty providing for an obligation to prevent such damage.44 b) Indus Waters Kishenganga arbitration. On 17 May 2010, the Islamic Republic of 44 Pakistan initiated arbitration proceedings against the Republic of India. The reason for the proceedings was the commencement of construction in 2007 of the Kishenga Hydroelectric Project in India, which resulted in part of the Indus River in Pakistan drying out. The Indus Waters Treaty, relating to the Indus River which flows through India and Pakistan, governs the use of the river in these two countries.45 The Water treaty contained an arbitration clause referring the dispute to the Permanent Court of Arbitration.46 In 2013, the arbitral tribunal ruled that India would be permitted to continue with construction but would have to guarantee a minimum flow of water.47 As these two examples show, disputes over natural resources between states can well be resolved by arbitration.

4. Disputes arising from international climate protection treaties a) UNFCCC. In 1992, 154 UN member states gathered at the “Earth Summit” in Rio 45 de Janeiro to decide on an international climate agreement: the United Nations Framework Convention on Climate Change. This international climate treaty entered into force two years later in 1994. Today there are 197 parties to the Convention including all UN member states. The Members of the Convention agreed, that the ultimate objective of this Conven- 46 tion was to achieve a stabilization of greenhouse gas concentrations in the atmosphere at 41 Cf International Bar Association, Climate Change Justice and Human Rights Task Force Report, 2014, 14, 139. 42 Wirth, Environmental History, Volume 1, Issue 2 1996, 34–51. 43 Cf https://legal.un.org/riaa/cases/vol_III/1905-1982.pdf. 44 Ellis, in: Bratspies/Miller (eds.), Transboundary Harm in International Law: Lessons from the Trail Smelter Arbitration, Cambridge University Press, 2006, 56, 65. 45 Shreyan, Transboundary Water Disputes, ETH Zurich, Reasearch Collection 2013, https://doi.org/ 10.3929/ethz-a-009989936. 46 Cf https://treaties.un.org/doc/Publication/UNTs/Volume%20419/volume-419-I-6032-English.pdf. 47 Cf https://pcacases.com/web/sendAttach/1684.

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a level that would prevent dangerous anthropogenic interference with the climate system, Article 2 UNFCCC. 47 To be able to fulfil this objective, parties to the Framework Convention meet at annual conferences, known as the Conferences Of Parties (“COP”). At these conferences the parties discuss, specify and further adapt specified measures and conclude further agreements. Two of the most important ones are the Kyoto Protocol of 1997 and the Paris Agreement of 2015. 48 As dispute settlement mechanisms the Framework Convention suggests that the Parties concerned shall seek a settlement of the dispute through negotiation or any other peaceful means of their own choice, Article 14 (a). Under Article 14 (b) a Party may declare that it recognizes as compulsory ipso facto in relation to any Party accepting the same obligation the submission of the dispute to the ICJ and/or Arbitration in accordance with procedures to be adopted by the Conference of the Parties as soon as practicable, in an annex on arbitration. 49 To date, the parties have not agreed on an Annex for Arbitration setting out the procedural rules. Therefore, inter-state arbitration is not likely to emerge soon under the UNFCCC.48 b) Kyoto Protocol. In 1997, the Conference of the Parties took place in Kyoto, Japan, in which an additional protocol to the UNFCCC was agreed: the Kyoto Protocol. For the first time, this Protocol established binding greenhouse gas emission reduction targets for industrialised countries (Annex I countries). 51 These Annex I countries committed to undertake mitigation and adaptation measures to reduce greenhouse gas emissions by 5.2 % below the level of 1990, to be achieved during the first commitment period from 2008 to 2012. This aim was achieved, which led to the states agreeing upon a second commitment period under the Kyoto II Protocol, expiring in 2020. 52 As for the settlement of disputes, Article 19 of the Protocol also refers to Article 14 of the UNFCCC which in principle could enable arbitration but until today does not exist. 50

c) Paris Agreement. In 2015, the COP 21 was held in Paris, where the so called “Paris Agreement” was concluded. It sets the goal to limit global warming to well below 2 degrees Celsius above pre-industrial levels and to pursue efforts to limit the temperature increase to only 1.5 degrees above pre-industrial levels. There is no specific list of measures to be undertaken in order to fulfil that goal. Instead the Agreement follows a “bottom-up” approach where each country makes Nationally Determined Contributions (NDC) of how they commit to contribute to that common goal. 54 Whereas the mechanisms of the Kyoto Protocol mainly aimed at mitigation, the measures addressed in the Paris Agreement also include adaptation, loss and damages and climate finance. 55 Regarding the settlement of disputes, Article 24 of the Paris Agreement sets out that the provisions of Article 14 of the Convention on settlement of disputes shall apply mutatis mutandis to this Agreement. Since these dispute settlement mechanisms have not yet been agreed upon, inter-state arbitration arising from the Paris Agreement is also not to be expected in the short term. 53

5. Disputes resulting from the implementation of international climate treaties 56

Even if arbitration proceedings resulting directly from climate treaties are not to be expected in the near future due to an absence of an arbitration agreement, disputes 48

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involving states, intergovernmental organisations and private parties in the form of mixed or private arbitrations will nevertheless arise from the implementation of these treaties.49 a) Kyoto Protocol. In the Kyoto Protocol countries have agreed to meet individual reduction targets. All industrialised countries have been allocated an assigned amount of CO2 emissions. The unit per tonne of CO2 is referred to as “Assigned Amount Unit” or “AAU”. Countries may trade these AAUs, i.e. a country which has used up less CO2 than allocated to it in the distribution plan may sell the remaining units to another country which still requires units (international emission trading). In addition, the Clean Development Mechanism (CDM) in the Kyoto Protocol allows each state to also achieve compliance with its emission limitation by supporting measures in a developing country. Therefore, an industrialised country which finances emissions reduction projects in a developing country will be given credits, known as certified emission reduction credits (CERs). Another method is Joint Implementation (JI). Under Joint Implementation, joint efforts are undertaken by industrialised countries for which emission reduction units (ERUs) can be acquired. It is far beyond the scope of this chapter to describe all potential dispute constellations resulting from these mechanisms.50 However, in fulfilling the Protocol’s objectives, together with states the private sector and NGO’s are playing a crucial role. As a consequence, disputes may and will arise amongst private parties and between private parties and states. Although little is known about the number of private disputes that have occurred51, it is known that the Permanent Court of Arbitration has administered a number of cases arising from the emission trading scheme, the Joint Implementation mechanism and the Clean Development Mechanism.52 Disputes (and subsequently arbitrations) may arise also between private parties in connection with emission monitoring determinations, bookkeeping determinations and compliance/sanction determinations.53 A good example is the carbon emission trading system and more specific the Emission Reduction Purchase Agreement (ERPA), a contract for the sale and purchase of emissions allowances under the Kyoto protocol. Many of the standard contracts in use contain arbitration clauses. The CDM Emissions Reduction Purchase Agreement of the International Emission Trading Association (IETA) provides in clause 15.11 an arbitration clause referring to the PCA and its Optional Rules for Arbitration of Disputes to Natural Resources and/or the Environment.54 Also the IETA Emissions allowance Single Trade Agreement for the EU Scheme provides for a PCA arbitration clause.55 Furthermore, for the use and implementation of the Kyoto protocol mechanisms the UNFCCC commissioned the Gold Standard Foundation.56 The Gold Standard Foundation is in charge of providing the sustainability certificates for the qualifying projects under the Clean Development Mechanism, to determine whether and to what extent 49

Ibid. Cf Kalas/Herwig, Ecology Law Quarterly 27, 2000, 53; Brown, Journal of International Dispute Settlement, Vol. 1, No. 2, 2010, 447–473. 51 Brown, Journal of International Dispute Settlement, Vol. 1, No. 2, 2010, 449. 52 ICC Commission Report: Resolving Climate Change Related Disputes through Arbitration and ADR, 2019, 59: “One case concerned the proper allocation of ‘assigned amount units’ to set o emissions against carbon credits. Another arose from alleged failure to pay success fees as stipulated in an agreement to develop a CDM landfill project.” 53 Kalas/Herwig, Ecology Law Quarterly 27, 2000, 53. 54 IETA’s CDM Emission Reduction Purchase Agreement (www.ieta.org). 55 IETA’s Emissions allowance Single Trade Agreement for the EU Scheme (www.ieta.org). 56 Cf www.goldstandard.org. 50

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projects reduce CO2 emissions and therefore whether CERs or ERUs may be acquired. The Gold Standard Foundation also certifies environmental projects and channels funding into the most efficient environmental projects and enable trading with CO2 emission reductions. The Gold Standard Foundation has incorporated an adapted version of the PCA environmental rules in their process for appeals against certification decisions.57 Thus, disputes resulting from CDM projects and the certification process of projects can be resolved by arbitration. b) Paris Agreement. The same applies for the Paris Agreement.58 The Paris Agreement obliges the states to undertake emission reduction measures based on selfreduction targets, so-called Nationally Determined Contributions (NDCs). Comparable elements to the Kyoto Protocol’s flexible mechanisms can also be found within the Paris Agreement. The Agreement speaks of cooperative approaches which can help a member state in achieving its NDC. According to Article 6 No. 1 some Parties choose to pursue voluntary cooperation in the implementation of their nationally determined contributions to allow for higher ambition in their mitigation and adaptation actions and to promote sustainable development and environmental integrity. 65 These voluntary cooperation mechanisms are anchored in a system of international carbon trading, consisting not in the transfer of Assigned Amount Units, but of socalled mitigation outcomes which can then again be measured against the NDC.59 66 These mechanisms include a cooperative Emission Trading Approach (Article 6.2., 6.3.), the Sustainable Development Mechanism (SDM, Article 6.4.) and the Joint Mitigation Mechanism for forest management (5.2.). The implementation of these mechanisms requires contracts with private sector companies, paving the way for a potential scope of international commercial arbitration. 64

6. Disputes due to transformation towards Green economy The target envisaged in the Paris Agreement of limiting global warming to less than 1.5 degrees Celsius above pre-industrial warming requires a major transformation of the economy. The 2019 IPCC Report60 talks of necessary “transformative systemic change, integrated with sustainable development” and “implementation of far- reaching, multilevel and cross-sectoral climate mitigation”. The main sectors referred to are energy, land-use, agricultural practice, infrastructure, transport and construction.61 68 The sectors and industries referred to will therefore undergo an enormous change in coming years and decades. Investments in renewable energies, increased use of solar energy, wind energy and electricity storage technologies and a general reduction of emissions in energy-intensive industries will be the result. The conversion to e-mobility is coming to the transport sector. The expected change will occur in a large number of new contractual relationships, supply chains, start-ups, services, infrastructure and construction projects and their respective financing. At the same time, there will be considerable regulatory intervention. Arbitration proceedings are already being used to a significant extent in the sectors concerned (in particular energy, infrastructure and construction) to resolve disputes. It is therefore expected that disputes resulting from 67

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Miles, Research Handbook on Environment and Investment Law, Edward Elgar, 2019, 239. Levine, Transnational Dispute Management, Vol 14, Issue 1 2017. 59 Luhmann/Arens, Zeitschrift für Umweltpolitik und Umweltrecht, Sonderausgabe zur Pariser UNKlimakonferenz, Jg. 39 2016, 95–101. 60 Cf https://www.ipcc.ch/site/assets/uploads/sites/2/2019/06/SR15_Full_Report_High_Res.pdf. 61 Ibid. 58

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the change to these industries will be resolved by arbitration.62 The content of these disputes cannot be restricted and will range from disputes about defects in the construction of renewable energy power stations, investments in environmentally friendly technologies and in the provision of new types of services to disputes about contractual and statutory compliance caused by stricter regulation, or disputes caused by shifted stakeholder expectations leading to requests to amend contracts. Many companies have voluntarily undertaken to become carbon-neutral or at least 69 achieve considerable reduction targets. To achieve this goal, a large number of contracts are being concluded, service providers are being commissioned, certifications are underway and whole supply chains are being reorganized. Initially, most of these initiatives will be privately funded and are contract-based. Arbitration proceedings are thus possible and widespread. All of these disputes are the classic type of commercial arbitration.

7. Disputes arising from climate finance Mitigation and adaptation of climate change as well as the transition towards a 70 carbon-free, sustainable economy, requires enormous financial effort. The OECD estimates that 6.3 trillion US dollars of investment is necessary annually between 2016 and 2030 to transform the economy into a sustainable economic system.63 In the Paris Agreement developed countries have committed to jointly mobilise 100 billion US dollars per year in climate finance by 2020.64 Even more financial contributions will be provided by the private sector. Most of the financing and financial contributions will be on a contractual basis. If and when disputes arise, arbitration is a suitable forum to resolve these disputes and is widely used already today. In order to raise and distribute the monies, the UN-States have established a number of 71 special funds: The Green Climate Fund (GCF), the Special Climate Change Fund (SCCF), the Least Developed Countries Fund (LDCF) and the Adaptation Fund (AF). The two most important funds and their relation to arbitration shall be outlined in more detail: a) Adaptation Fund. Under the Kyoto Protocol the Adaptation Fund was established 72 in 2001, in order to finance adaptation projects and programmes in developing countries affected by climate change.65 This Fund can be considered as the first step towards a global Climate Finance Architecture. It has several sources of funding such as contributions by governments and private donors. Additionally, two percent of the share of proceeds of Certified Emission Reductions issued under the Kyoto Protocol’s flexible mechanisms are contributed to the fund.66 At the COP24, Parties agreed that the Fund shall also serve the Paris Agreement and that the financing of the fund had to be adapted.67 Since 2010 the fund has financed 100 concrete adaptation projects with US $ 720 mil- 73 lion.68 The Funds operating entity is the Adaptation Fund Board (AFB). This Board meets at least three times a year in Bonn, Germany and consists of 16 members and 16 alternates representing the Parties of the Kyoto Protocol. It supervises and manages 62 ICC Commission Report: Resolving Climate Change Related Disputes through Arbitration and ADR 2019, Annex: Climate Change Related Disputes in Practice, 53. 63 Cf https://www.oecd.org/environment/cc/g20-climate/executive-summary-investing-in-climate-investing-in-growth.pdf. 64 Cf https://unfccc.int/topics/climate-finance/the-big-picture/climate-finance-in-the-negotiations. 65 Cf https://www.adaptation-fund.org/. 66 Cf https://www.adaptation-fund.org/about/. 67 Cf https://www.adaptation-fund.org/adaptation-fund-shall-serve-paris-agreement-starting-january1st-2019/. 68 A Project Map View showing all the financed projects and information about each project can be found on the Adaptation Funds website: https://www.adaptation-fund.org/about/.

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the fund’s activities under the guidance of the Conference of the Parties serving as the meeting of the Parties to the Kyoto Protocol (CMP), to which it regularly has to report. One of the distinguishing features of the Adaptation Fund is the Direct Access Funding Model, a mechanism enabling implementing entities direct access to climate adaptation financing. Many contracts have been and will be concluded within the framework of the Adaptation Fund, making commercial arbitration an attractive and already used tool to resolve disputes arising in the fund’s context. This is due to the fact that arbitration is designated as the dispute resolution mechanism of choice in the context of the Adaptation Fund. Firstly, an arbitration clause can be found within the Model Agreement between Adaptation Fund Board and the implementing entity. When a specific adaptation project is submitted, the Adaptation Fund Board and the implementing entity receiving the financial support conclude an Agreement, in which the Fund Board agrees to provide the Grant for the purposes of the Project. Article 15.02 of this Model Agreement69 states that any dispute, controversy or claim arising out of or relating to this Agreement, or the breach, termination or invalidity thereof, which has not been settled amicably between the Board and the Implementing Entity shall be settled by arbitration in accordance with the UNCITRAL Arbitration Rules as presently in force. Secondly, an arbitration clause can be found in the Agreement between the Adaptation Fund and the World Bank. The World Bank acts as the trustee of the Adaptation Fund on an interim basis. The Decision -/CMP.10 by the Conference of the Parties established the Terms and Conditions such as the necessary legal arrangements for the World Bank to serve as a Trustee for the Adaptation Fund. The decision states that any dispute, controversy or claim arising out of or relating to the Terms and Conditions, which has not been settled by agreement between the CMP and the Trustee, shall be submitted to arbitration in accordance with the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL) in force on the effective date of the Terms and Conditions, and the following provisions: (1) the appointing authority shall be the Secretary-General of the Permanent Court of Arbitration.

b) Green Climate Fund. The Green Climate Fund was established in 2010. It serves as an operating entity of the financial mechanisms of both the UNFCCC and the Paris Agreement.70 It is intended to be the centrepiece of efforts to raise climate funds under the UNFCCC and the Paris Agreement. According to the Decision 1/CP.16 it aims to support projects, programmes, policies and other activities in developing country Parties using thematic funding windows. Its operating entity is the Green Climate Fund Board, consisting of 24 members and supported by the Boards Secretariat. The Green Climate Fund is headquartered in Incheon, South Korea. 79 The Fund receives its funding inter alia from contributing states. Apparently, the model contract for Contributing Agreements contain arbitration clauses with reference to the PCA rules with the place of arbitration in Seoul, South Korea.71 The Contribution Agreement concluded with France constitutes an ICC Arbitration. Disputes in connection with a state’s contribution will therefore be settled by arbitration. 80 For developing countries there are two main ways to access the Green Climate Fund. One is the so-called “International Access”. Under the International Access mode, developing countries can access the fund via accredited international Implementing 78

69 Cf https://www.adaptation-fund.org/wp-content/uploads/2011/10/Revised-AGREEMENT-as-of-Mar2018.pdf. 70 Carlarne, 25 Geo. Int’l Envtl. L. Rev. 1, 2013. 71 Cf Contributing Agreement between Norway and the Green Climate Fund.

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Entities. Such are, for example, UN organisations, multilateral development banks, but also international commercial banks. In the “Direct Access” mode, developing countries can access the Green Climate Fund via accredited national, regional, or sub-regional Implementing Entities. After a successful application for the financing of an (adaptation) project, an Accreditation Master Agreement (AMA) is concluded between an accredited Implementing Entity and the Green Climate Fund. When the entity is a public entity, the Accreditation Master Agreement very often calls for the application of international law and arbitration according to PCA rules. When the entity is a private sector company, the Accreditation Master Agreement and its dispute resolution mechanism resemble more what is known from normal private contracts. For example, the Accreditation Master Agreement concluded with Deutsche Bank stipulates that English law shall apply and provides for an ICC Arbitration with its seat in England. The AMA between the International Union for the Conservation of Nature and the Green Climate Fund refers disputes to the ICC and the AMA between the UN Environment Program and Green Climate Fund refers disputes to the PCA. Apart from the Accreditation Master Agreement there are several other agreements concluded within the Framework of the Green Climate Fund in which arbitration can come into play. Once an entity is accredited, it develops funding proposals which eventually lead to a Grant Agreement between the accredited entity and the Green Climate Fund. Some of these Grant Agreements include arbitration clauses such as the Framework Agreement between the Green Climate Fund and the Deutsche GIZ, in which disputes are referred to the ICC. According to Clause 29 of this Agreement any dispute, controversy or claim arising out of or relating to this Agreement, including any issue as to the breach, termination or invalidity thereof or any dispute regarding non-contractual obligations arising out of or relating to it, that is not been resolved through negotiation pursuant to Clause 29.01 above, shall be settled under the Rules of Arbitration of the International Chamber of Commerce by three arbitrators appointed in accordance with said Rules in effect on the date of this Agreement. The place of arbitration shall be The Hague, the Netherlands. The language of arbitration shall be English. The Grant Agreement between the Corporacioón Andina de Fomento and the Green Climate Fund provides for PCA arbitration. Another field of potential disputes could be co-financing. The Green Climate Fund has established a private sector facility which aims at attracting private funding to cofinance projects. To that end, the private sector facility tries to offer attractive packages to private investors by, for example, scaling projects or combining various projects to achieve an attractive investment volume and minimise risk. The World Bank is serving as an interim trustee of the Green Climate Fund. According to Article 10.2. of the Agreement on the Terms and Conditions for the Administration of the Green Climate Fund Trust Fund between the Green Climate Fund and the World Bank any disputes arising out of this Agreement shall be submitted to PCA arbitration. Arbitration can also come into play where private sector companies are involved. Potential disputes can concern the raising of funds, the funding of eligible projects, the implementation, execution, monitoring and certification of funded projects, but also activities surrounding the funding itself, for example, the accreditation process.

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8. Corporate disputes Finally, a large number of climate change disputes between shareholders or between 88 shareholders and management can already be seen today. Lennarz

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By exercising shareholder rights, shareholders try to exert pressure on the management and influence the strategy and economic decisions of the company. A variety of attempts are being made to oblige companies to act in a climate-friendly manner or make management liable for corporate decisions or investments which have detrimental effect on the climate. 90 These actions are based on – breach of the duty to safeguard assets by an entrepreneurial decision, – breach of information duties regarding climate change risks, – breach of human rights/constitutional rights by companies, – the company’s duty to comply with environmental laws and/or international treaties. 91 As far as can be seen, these actions are currently being conducted before state courts.72 Similar to the above discussed political disputes and disputes of public pressure groups, the claimants often seek publicity and thus have no interest in arbitration. However, it is also conceivable that these corporate law disputes be conducted before arbitral tribunals. If a company’s articles of association contain an arbitration clause, internal disputes may (or must) be conducted in arbitration proceedings. 92 As all of the above examples show, arbitration does and will play a very important role when it comes to climate change disputes. 89

V. Arbitral institutions and climate change 93

Since a rise of climate change related disputes are expected, an increasing number of arbitral institutions have established climate change on their agenda73 and have positioned themselves as the best suitable forum for climate change disputes. In 2014 the IBA Task Force on Climate Change Justice encouraged arbitral institutions to take appropriate steps to develop rules and/or expertise specific to the resolution of environmental disputes, including procedures to assist consideration of community perspectives.74 The two most important institutions in this respect and their efforts can be summarized as follows:

1. Permanent Court of Arbitration, The Hague 94

The Permanent Court of Arbitration is an intergovernmental organisation situated in The Hague in the Netherlands. It was established as a result of the Hague Convention of 1899. According to Article 20 of the 1899 Convention, its main object is facilitating an immediate recourse to arbitration for international differences which it has not been possible to settle by diplomacy. What started as the first mechanism of settling international disputes between states, has developed into a global framework offering administrative support in inter-state, investor-state and contract-based arbitrations. Meanwhile the PCA has 122 contracting parties.75 72 E.g., successful claim of NGO ClientEarth as shareholder of a Polish energy provider claiming for the invalidity of an investment decision to build a new coal power plant: District Court in Poznan (Poland), ClientEarth v ENEA, http://climatecasechart.com/non-us-case/clientearth-v-enea/; Securities Fraud lawsuit: US District Court for the Northern District of Texas, Ramirez v Exxon Mobil Corp., Case 3:16-cv03111-K; Failure to disclose climate change information: US State District Court for the Southern District of Texas, Fentress v Exxon Mobil Corp., Case No: 4:16-cv-03484. 73 ICC Commission Report: Resolving Climate Change Related Disputes through Arbitration and ADR, 2019, 2.4. 74 International Bar Association, Climate Change Justice and Human Rights Task Force Report, 2014, 28. 75 Cf https://pca-cpa.org/en/about/.

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In 2001, the PCA adopted specialised procedural environmental rules for arbitration and conciliation, the Optional Rules for Arbitration of Disputes relating to Natural Resources and/or the Environment. In doing so, the PCA has become a special forum for environmental disputes and positioned itself as an Alternative to an International Environmental Court.76 The Optional Rules for Arbitration of Disputes relating to Natural Resources and/or the Environment rules are based on the 1976 UNICTRAL Arbitration Rules and aim to introduce certain procedural features reflecting the particular characteristics of disputes having a natural resources, conservation, or environmental protection component.77 – First, the rules have been made available to state actors, as well as to non-state actors such as international organisations, NGOs and private parties such as multinational corporations or even individuals, making any combination of parties possible.78 – Second, in order to reflect the public international law element which pertains to disputes which may involve States and utilization of natural resources and environmental protection issues, Article 33 of the Rules allows for the application international law. Article 33 determines the applicable law as either designated by the parties or, in the absence of a designated law, gives the arbitral tribunal the discretion to apply the national and/or international law and rules of law it determines to be appropriate, which means that a decision could be made based on international climate treaties. – Further, the PCA provides the establishment of a specialised list of arbitrators nominated by PCA Member States mentioned in Article 8 (3). The PCA publishes a list of persons considered to have expertise in the subject-matters of environmental and climate disputes.79 – Finally, the PCA also provides a list of scientific and technical experts, which can be called upon as expert witnesses by the arbitral tribunal to report to it on specific issues to be determined by the tribunal.80 The rules have been widely considered as a successful attempt to overcome the shortcomings of classical international dispute resolution in dealing with environmental issues, for instance by granting access to non-state actors to an environmental dispute forum and by providing flexibility to the parties.81 As a consequence, an increasing number of international treaties expressly refer to the PCA’s specialized environmental rules.82

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2. International Court of Arbitration of the ICC, Paris The ICC, the world’s leading institution for international commercial disputes, has 99 closely followed the development of international climate treaties and the rise of climate change disputes.

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Vespa, The Law and Practice of International Courts and Tribunals, 2003, 295. Meshel, Oxford Public International Law 2016, https://opil.ouplaw.com/view/10.1093/law-mpeipro/ e2810.013.2810/law-mpeipro-e2810. 78 Garimella, ILI Law Review, Summer 2016, 199–222. 79 Specialized panel of arbitrators: https://pca-cpa.org/wp-content/uploads/sites/6/2016/07/CurrentList-Annex-2-SP-ARB-update-20190930-184035-v10.pdf. 80 Specialized panel of scientific experts: https://pca-cpa.org/wp-content/uploads/sites/6/2016/07/Current-List-Annex-3-SP-SciEXP-update-20190930-184038-v6.pdf. 81 Meshel, Oxford Public International Law 2016; International Bar Association, Climate Change Justice and Human Rights Task Force Report 2014, 140. 82 E.g., “the Compact”, a Private Sector Initiative that emerged out of the UN Convention on Biological Diversity. Further references, supra IV.5.a). 77

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101

102

103

104 105

The ICC, together with the PCA, the IBA and the SCC has organised dispute resolution related side events to the Conference of the Parties to provide a forum of open discussion about the role of arbitration and ADR in climate related disputes. The first side event took place during the COP 21 on “Climate Change Related Disputes: A Role for International Arbitration and ADR”. A second side event was hosted in 2016 during the COP 22 on “Bridging the Climate Change Policy Gap: The Role of International Law and Arbitration”. In 2017, a third side event took place during the COP 23 on “Supporting the UNFCCC and the Paris Agreement through International Dispute Settlement”. Further, in 2015 the ICC Rules for the Administration of Expert Proceedings came into force, in which the ICC Centre of ADR offers services for the proposal or the appointment of experts and the administration of expert proceedings. In order to find an expert on climate change related disputes with scientific or technical expertise, the ICC Centre for ADR offers to conduct a research based on its worldwide network of professionals.83 In April 2017, the ICC Commission on Arbitration and ADR constituted a task force on Arbitration of Climate Change Related Disputes to explore the future role of arbitration in climate change related disputes. In 2019, this task force published an ICC Commission report on “Resolving climate change related disputes through arbitration and ADR”.84 In this report, the task force predicts a rise of climate change related transition, adaptation and mitigation disputes, in which arbitration could come into use. The ICC task force describes the advantages of arbitration and ADR services for the resolution of climate related disputes and comes to the conclusion that the main benefit within the ICC arbitration system is that states or state entities can be taken into account as participants in an arbitral dispute. Furthermore, arbitral awards are subject of cross-border recognition and enforcement so that the international dimension of climate change is met. Additionally, arbitral tribunals can provide the expertise needed in these scientifically complex cases and are flexible as to the place of the arbitration and the costs, since they can be individually agreed upon between the parties, making arbitration accessible to stakeholders. The task force also introduces six procedural features, by which existing procedures could be made more effective in relation to climate change related disputes: a) Securing relevant expertise. Expertise should not only be secured when choosing arbitrators, but also when appointing experts. To ensure that the arbitral tribunal “shall have expertise in general principles of climate change policy and climate change law”85 or specific technical expertise, clauses could be added to the ICC Standard Arbitration agreement. Furthermore, party or tribunal appointed experts with special climate expertise could be appointed following a clause inserted into the arbitration agreement. Such an appointment should be facilitated by utilisation of the facilities of the ICC International Centre for ADR to identify individuals with appropriate climate change related expertise. Last, the role of that Centre is variable, as it could put forward the name of an expert, directly appoint an expert or administer and supervise the entire expert proceedings.

83 ICC Commission Report: Resolving Climate Change Related Disputes through Arbitration and ADR, 2019, 32. 84 Ibid. 85 Cf ICC Arbitration and ADR Commission Report 2019, § 5.11, https://iccwbo.org/publication/iccarbitration-and-adr-commission-report-on-resolving-climate-change-related-disputes-through-arbitration-and-adr/.

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b) Faster and more effective procedures. As “the environmental impact and effects 106 on populations are often irreversible if not dealt with at an early enough stage”,86 parties could adopt certain case management techniques, such as bifurcating the proceedings, deciding solely on written documents rather than oral evidence or facilitating dispute resolution by negotiation or ADR. Moreover, parties could apply the ICC Expedited Procedure, given that the amount in dispute does not exceed US $ 2 million, or the parties agreed otherwise. Also, Emergency proceedings, pursuant to the ICC Emergency arbitration Rules or interim measure under ICC Arbitration Rules Article 28 (2) could ensure a timely resolution of the dispute. Last, the ICC Arbitration rules provide under Appendix V on case management techniques examples that control proportionate use of time and cost expenses. c) Integration of climate change policy, commitments or laws. ICC arbitration 107 tribunals are bound by the law which the parties have agreed on. Increasingly, national and international legislation is adopted in relation to climate change issues. The governing law clause of the arbitration agreement could be amended to highlight the importance of international agreements such as the UNFCCC and the Paris Agreement. d) Transparency. In view of the ICC Task force, transparency in climate change 108 related dispute is of foremost importance. As “the lack of transparency in traditional commercial arbitration has been viewed as a barrier to its legitimacy”,87 climate change related disputes should be scrutinised by the public. Therefore, arbitration agreements could be adapted by “opening the proceedings to the public, including in the publication of submissions, procedural decisions and hearings; and publication (or even redacted publication) of awards”.88 Furthermore, the ICC already strives for greater transparency by publishing on the ICC website inter alia: (i) the names of the arbitrators; (ii) the arbitrators’ nationalities; (iii) the arbitrators’ role within a tribunal; (iv) the method of appointment; and (v) whether the arbitration is pending or closed.89 e) Third party involvement. Climate change related disputes often involve public 109 interests but also may benefit from involvement of affected individuals such as citizens and peoples. While the ICC Arbitration Rules allow parties to seek to join additional parties (Article 7), as well to bring claims against multiple other parties (Article 8) in respect of multiple contracts (Article 9), the arbitral tribunal cannot permit third parties to join of their own accord. Hence, “any involvement by third parties in the arbitral process requires the clear and express consent of the parties”.90 While it is widely accepted that multiparty arbitration has the advantage of enabling the dispute to be resolved in one single procedure taking account of all issues and the interests of all parties affected and can save considerable costs and time91, it requires the consent of all involved parties. The arbitration clause could therefore be adapted to ensure the possibility of multi-faceted climate change related disputes even where different arbitration clauses are not compatible, but parties nevertheless wish to consolidate proceedings.

Ibid. § 5.34. Ibid. § 5.66. 88 Ibid. § 5.70. 89 Ibid. § 5.73. 90 Ibid. § 5.80. 91 Lew/Mistelis/Kröll, Comparative International Commercial Arbitration 2003, ch. 16, §§ 16–2 and 16–3. 86 87

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VI. Summary 110

In summary, it can be concluded that arbitration is a dispute resolution mechanism suitable not for all, but for many climate change disputes. It will play a very important role in the future when it comes to disputes triggered by the ever worsening climate change. Arbitration will have its role both in contractual disputes (commercial arbitration) as well as in disputes where states are involved and where public international law defines the legal relationships of the parties. The major international arbitration institutions have positioned themselves as important stakeholders both for promoting climate change arbitration as well as for administering these disputes in the future.

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F. Conflicts of jurisdiction and the applicable law in domestic courts’ proceedings Bibliography: Basedow/Rühl/Ferrari/de Miguel Asensio, Encyclopedia of Private International Law Vol. II, Edward Elgar Publishing 2017; Bogdan/Pertegás Sender, Concise Introduction to EU Private International Law, 4th ed., Europa Law Publishing 2019; Calliess, Rome Regulations, 2nd ed., Wolters Kluwer 2015; Cheshire/ North/Fawcett, Private International Law, 15th ed., Oxford University Press 2017; Dasser/Oberhammer, Lugano Übereinkommen, 2nd ed., Stämpfli Verlag 2011; Dicey/Morris/Collins, The Conflict of Laws Vol. I&II, 15th ed., Sweet & Maxwell 2012; Dickinson/Lein, The Brussels I Regulation Recast, Oxford University Press 2015; Dutta, Internationale Zuständigkeit für privatrechtliche Klagen gegen transnational tätige Unternehmen wegen Verletzung von Menschenrechten und von Normen zum Schutz der natürlichen Lebensgrundlagen, in: Reinisch et al. (Hrsg.) Unternehmensverantwortung und internationales Recht, C.F. Müller, 2020, 39; Hay/ Borchers/Symeonides/Whytock, Conflict of Laws, Hornbook Series, 6th ed., West Publishing 2018; Hüßtege/ Mansel, Nomos Kommentar BGB, Rom-Verordnungen, Band 6, 3th ed. 2019; Lehmann/Eichel, Globaler Klimawandel und Internationales Privatrecht, RabelsZ 83 (2019), 77; Magnus/Mankowski, European Commentaries on Private International Law, Vol. 1: Brussels Ibis Regulation – Commentary, Verlag Dr. Otto Schmidt 2016; Mankowski, Ausgewählte Einzelfragen zur Rom II-VO: Internationales Umwelthaftungsrecht, internationales Kartellrecht, renvoi, Parteiautonomie, IPRax 2010, 389; Plender/Wilderspin, The European Private International Law of Obligations, 4th ed., Sweet & Maxwell 2014; Pöttker, Klimahaftungsrecht, Mohr Siebeck 2014; Van Loon, Principles and building blocks for a global legal framework for transnational civil litigation in environmental matters, Uniform Law Review 23 (2018), 298; Zekoll/Schulz, Neue Grenzen für die internationale Zuständigkeit amerikanischer Gerichte?, RIW 2014, 321;

Contents I. Introduction ..................................................................................................... 1. Road map ..................................................................................................... 2. Cross-border elements giving rise to questions of private international law ......................................................................................... 3. No universal rules with respect to jurisdiction and Choice of Law .. II. State immunity and “political question doctrine”................................... 1. State immunity ............................................................................................ a) General principles ................................................................................. b) Principles of state immunity applied to climate change litigation .................................................................................................. aa) Claims against states ..................................................................... bb) Claims against state-owned corporations................................. 2. “Political question doctrine” as a limitation to cross-border proceedings .................................................................................................. III. Jurisdiction ....................................................................................................... 1. Introduction................................................................................................. a) Meaning and relevance of international jurisdiction.................... b) Connection with recognition and enforcement ............................. c) Overview of legal sources .................................................................... 2. Brussels Ibis Regulation and Lugano Convention .............................. a) Applicability ........................................................................................... aa) Subject matter must be “civil and/or commercial” ................ bb) Personal applicability .................................................................... cc) Application in time........................................................................ b) General jurisdiction at the defendant’s domicile: Art. 4 (1) Brussels Ibis Reg.................................................................................... c) Special jurisdiction for actions in tort: Article 7 No. 2 Brussels Ibis Regulation ....................................................................................... aa) CJEU: Place where the harmful event occurred or location of damage......................................................................................... bb) CJEU: Multi-state torts .................................................................

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Part 2. Procedural issues and Conflict of Laws cc) Application to climate change litigation................................... d) Special jurisdiction for joint claims against domestic anchor defendant and foreign subsidiary ...................................................... 3. EU Member States’ autonomous rules on jurisdiction...................... a) Place of damage for liability in tort .................................................. b) Joint action against EU parent company and third-state subsidiary ................................................................................................ c) Exorbitant heads of jurisdiction ........................................................ 4. United States: Personal jurisdiction of state and federal courts ...... a) General jurisdiction .............................................................................. b) Specific jurisdiction............................................................................... c) Exorbitant heads of jurisdiction: Transient rule ............................ d) Subject-matter jurisdiction: Alien Tort Statute .............................. e) Forum non conveniens ........................................................................ f) Consequences for climate change litigation concerning damages or protective measures against corporations ................. IV. Choice of Law .................................................................................................. 1. Introduction................................................................................................. 2. EU: Liability in tort (delict) according to the Rome II Regulation. a) Applicability ........................................................................................... b) Freedom of choice of law, Article 14 Rome II ............................... c) Special rule on environmental harm, Article 7 Rome II.............. aa) Applicability .................................................................................... bb) Place of damage rule ..................................................................... cc) Option............................................................................................... dd) Scope of the applicable law.......................................................... d) Article 17 Rome II Regulation ........................................................... aa) Local data rule ................................................................................ bb) Article 17 and the possible impact of permits or authorisations in accordance with public law ......................... e) No analogous application of Article 5 (1) (ii) in cases of environmental liability ......................................................................... f) Internationally mandatory rules and ordre public ........................ 3. Autonomous PIL: Property law .............................................................. 4. US conflict of laws......................................................................................

22 26 28 29 30 31 32 33 34 36 37 38 39 40 40 41 41 44 45 46 47 48 49 50 50 53 56 58 59 60

I. Introduction 1. Road map 1

In cross-border civil lawsuits, two crucial questions arise which must be answered before a court can start to adjudicate on the substantive merits of the case.1 The first is the matter of international jurisdiction (in the US: personal jurisdiction), i.e. the question whether the courts of the forum state are competent to hear and decide the case (below, III: Jurisdiction). When this question is answered in the affirmative, the court must, secondly, resolve a preliminary question on the merits by determining the applicable law, since in the absence of internationally uniform law on civil liability for environmental harm and subsequent damage to life, health and property, courts will usually have to apply national private law on the substantive issues (below, IV: Choice of law). Where states,2 state agencies or state-owned corporations are sued in a foreign court, immunity 1 The former Secretary General of the Hague Conference on Private International Law, Hans van Loon, speaks of a “key role for private international law in such law suits”, cf van Loon, ULR (2018), 298 (305). Cf also, albeit very briefly, Chatzinerantzis/Appel, NJW 2019, 881. 2 Cf for example the famous Case The State of the Netherlands v. Urgenda Foundation, Gerechtshof Den Haag, 9.10.2018, ECLI:NL:GHDHA:2018:2610.

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based on public international law can also become an issue. This is briefly discussed below, sub. II. As will be shown below, sub. I. 3, the relevant rules on international jurisdiction and the applicable law are originally and basically national law, despite the subject-matter being international in its very nature. Only the EU has so far been successful in unifying large parts of the relevant legislation. Parts III.2. and IV.2. are dedicated to EU law, and Parts III.4. and IV.4. give a short introduction to US law. However, before entering into any discussion on Private International Law (in the broad sense, including both jurisdiction and choice of law), it seems helpful to briefly determine which elements render a lawsuit an international one.

2. Cross-border elements giving rise to questions of private international law The typical defendants of climate change litigation in civil courts (as opposed to 2 administrative or constitutional courts) are corporations that are held to contribute to carbon dioxide and other greenhouse gas emissions; for example, companies engaged in the extraction, production, storage and dissemination of fossil energy (coal, oil and gas).3 But the range of possible defendants is nearly limitless, since it can potentially include every individual and corporation that is engaged in the production or use of equipment that consumes unnecessarily high amounts of fossil energy or produces greenhouse gas emissions on a large scale; for example, car manufacturers, airlines, cruise ship companies, the food industry and industrial farming.4 Thus, human action that triggers emissions (and hence climate change), the emissions themselves, and the impact that climate change has on weather extremes (e.g. storms, droughts and heatwaves) and the consequences of these extremes on life, health, property and human activities generally are all global, cross-border phenomena. Yet, the inherently international character of climate change and its consequences does not mean that private international law will automatically be an issue in every civil climate change litigation. Instead, there has to be a concrete crossborder element in the facts of the individual case. This requisite international element is most frequently provided by the environmen- 3 tal harm and the fact that the action triggering it being located in different jurisdictions – something that will, in addition, often lead to the plaintiff(s) and the defendant(s) being located in different jurisdictions. A good example is the lawsuit of a Peruvian landowner and farmer against the German-based company RWE because of the latter’s contribution to global warming, which has contributed to the melting of a glacier. This has in turn led to a rise in the water level of a lake that is situated above the Peruvian farmer’s land, threatening to flood it.5 In other cases, questions of international jurisdiction and conflict of laws may be triggered by the corporate or commercial structure of the defendant(s); for example, where victims of the activities of a parent company’s subsidiary or contractor situated in a foreign host state try to sue the parent company in its own home state.6 Although the commercial activity and the harm done in this scenario may occur in the same jurisdiction, the plaintiff(s) and the defendant parent company are still located in different jurisdictions. In contrast, in cases where local inhabitants sue domestic corporations because of their contribution to greenhouse gas emissions or their failure to engage in protective measures, international jurisdiction and the question of the applicable law will most likely not be taken up as separate issues 3 Cf for example Native Village of Kivalina and City of Kivalina v. ExxonMobil corporation and others, Ninth Circuit Court of Appeals, 21.9.2012, 696 F.3 d 849. 4 Cf Ahrens, VersR 2019, 645 (646). 5 OLG Hamm, Court Order of 30 November 2017, ZUR 2018, 118. 6 Van Loon, ULR (2018), 298 (305).

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by the courts, even if neither the emissions nor the damage resulting from them are limited to the state in which the parties to the lawsuit are located.

3. No universal rules with respect to jurisdiction and Choice of Law Despite the international character of private international law (in the broad sense, including conflicts of jurisdiction), its rules are, as a matter of principle, national in origin. However, some have been unified at a supranational or international level, either in the framework of regional economic integration (in particular within the EU; see below, III.2 and IV.2) or through international conventions, such as under the auspices of the Hague Conference (below, III.1.c). There are, of course, numerous worldwide initiatives and international soft law instruments for better protecting human and environmental rights and fostering corporate social responsibility, such as the UN Guiding Principles on Business and Human Rights, 2011 (“Ruggie Principles”);7 the 2030 Agenda for Sustainable Development and its 17 Sustainable Development Goals;8 the UN Global Compact Initiative;9 and the 2011 OECD Guidelines for Multinational Enterprises,10 to name but the most important ones. Yet none of them has any direct legal impact, neither on the level of private international law nor on the substantive law level, although they call on states to implement effective mechanisms to protect human rights and to provide access to effective remedies if violations nevertheless occur.11 It is generally held that these soft law instruments do not bind states legally, so that they are even less capable of being sources of jurisdictional rules that could be invoked by parties in civil litigation.12 5 In contrast, the “Legally Binding Instrument to Regulate, in International Human Rights Law, the Activities of Transnational Corporations and Other Business Enterprises” that is currently being developed by the United Nations Human Rights Council13 would be binding upon contracting states, as the title suggests. According to the current draft Article 7 on “Adjudicative Jurisdiction”, it would grant victims of human rights violations (including environmental rights; see the definition of human rights in draft Article 1), regardless of their nationality, access to the courts of the state a) where acts or omissions that resulted in the violations occurred, b) where the victims are domiciled, or c) where the persons alleged to have committed such acts or omissions are domiciled (subsection 2 defines domicile in more detail).14 If and when this draft will have matured into an International Convention and will have entered into force, it will in fact regulate the international jurisdiction of the courts of the 4

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www.ohchr.org/Documents/Publications/GuidingPrinciplesBusinessHR_EN.pdf. https://www.un.org/sustainabledevelopment/development-agenda/. 9 https://www.unglobalcompact.org/about. 10 http://www.oecd.org/corporate/mne/48004323.pdf. Recommendations no. IV.6. lit b and lit c explicitly address greenhouse gas emissions. 11 Cf for example “Ruggie principle” No. 1: “States must protect against human rights abuse within their territory and/or jurisdiction by third parties, including business enterprises. This requires taking appropriate steps to prevent, investigate, punish and redress such abuse through effective policies, legislation, regulations and adjudication”; No. 2: “States should set out clearly the expectation that all business enterprises domiciled in their territory and/or jurisdiction respect human rights throughout their operations”; and No. 25: “As part of their duty to protect against business-related human rights abuse, States must take appropriate steps to ensure, through judicial, administrative, legislative or other appropriate means, that when such abuses occur within their territory and/or jurisdiction those affected have access to effective remedy.” 12 Van Loon, ULR (2018), 298 (303); Dutta, p. 47; Habersack/Ehrl, AcP 219 (2019), 155 (179). 13 Cf https://www.ohchr.org/EN/HRBodies/HRC/WGTransCorp/Pages/IGWGOnTNC.aspx. 14 Cf revised draft of 16th July 2019, https://www.ohchr.org/Documents/HRBodies/HRCouncil/ WGTransCorp/OEIGWG_RevisedDraft_LBI.pdf. 8

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contracting states and – albeit to a lesser extent – harmonise the rules on the applicable law (see draft Art. 9). But as the law currently stands, there is no general international legal instrument or binding customary rule of public international law that would regulate international jurisdiction for human rights violations or environmental damage.15

II. State immunity and “political question doctrine” 1. State immunity a) General principles. Immunity is at stake when a foreign state or government is 6 sued in a domestic court. If it is successfully invoked, any lawsuit in front of a civil (or indeed criminal) court is barred. Public international law knows the maxim that “par in parem non habet imperium”: a sovereign state is not subject to another state’s jurisdiction. Since World War II, international customary law adheres to the notion of “restricted state immunity” and hence distinguishes between acta iure imperii, acts where states execute their public powers, and acta iure gestionis, acts where states engage in commercial transactions with natural or juridical persons.16 Immunity from foreign jurisdiction is only granted in the first case (acta iure imperii).17 In order to judge the nature of the act, the act itself, rather than its ultimate goal, must be considered.18 Otherwise, the distinction would be largely meaningless, since all acts undertaken by public authorities in one way or other should promote public welfare. Even if acta iure imperii are at stake, immunity may be limited if the state itself has initiated the relevant court proceedings and subsequently finds itself as the defendant of a counter-claim, or where a state has expressly consented to the exercise of foreign jurisdiction.19 There is a debate whether immunity should be further excluded where a state has grossly violated international humanitarian law, but current court practice does not embrace this idea.20 The relevant sources for the aforementioned principles differ: some states have 7 enacted them nationally but with effect vis-à-vis the world at large (see for example 15

Dutta, p. 47. Cf Queirolo, in: Basedow/Rühl/Ferrari/de Miguel Asensio (eds.), Encyclopedia of Private International Law Vol. II, 2017, 896 (897). 17 Cf for example the decision of the German Constitutional Court, BVerfGE 16, 27. A more recent example is the failure of claims from private investors against the Greek state before German courts for cutting repayments on bonds that were issued by the Greek state by 50 % because of the state’s financial crisis. The law providing for the cuts was held to have been passed as acta iure imperii, cf BGH 8.3.2016, NJW 2016, 1659. 18 Cf for example BGH IPRspr. 1974 No. 1 b: A broker in the arms trade sued the Portuguese state for payment of his promised commission. The deal between the state and the broker was held to be “acta iure gestionis” although the ultimate use of the weapons purchased through the agent would clearly be “acta iure imperii”. 19 Cf Arts 7, 8 and 9 of the United Nations Convention on Jurisdictional Immunities of States and Their Property, 2004 (not in force). 20 Cf International Court of Justice, Jurisdictional Immunities of the State (Germany v. Italy: Greece intervening), Judgment, I.C.J. Reports 2012, p. 99 (142) mn. 97: “Accordingly, the Court concludes that even on the assumption that the proceedings in the Italian courts involved violations of jus cogens rules, the applicability of the customary international law on State immunity was not affected.” Cf also the summary: “It [The Court] stated in this connection that, under customary international law as it presently stood, a State was not deprived of immunity by reason of the fact that it was accused of serious violations of international human rights law or the international law of armed conflict.” Cf also BVerfG, NJW 2006, 2542; ECJ Case C-292/05 Lechouritou and others v Bundesrepublik Deutschland [2007] ECR I-01519. Cf also R. Wagner, RIW 2013, 851. 16

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the UK State Immunity Act 197821 and the United States Foreign Sovereign Immunities Act),22 while others, including Germany, Belgium, Austria, the Netherlands and Switzerland, are parties to the European Convention on State Immunity (1972). However, this convention only applies where both the forum state and the defendant state are parties to it. The UN Convention on State Immunity (2004) has not yet entered into force. Where no statutory source or convention exists, the principles are applied by way of international customary law. 8

b) Principles of state immunity applied to climate change litigation. aa) Claims against states. If states are sued in a foreign court for not taking adequate steps to combat climate change or to adapt to its consequences, they will usually be able to invoke immunity against the admissibility of such claims because these omissions are decisions of the state authorities within their sovereign executive or legislative powers – they are not commercial activities. This means that cases like Urgenda v Netherlands23 can only be brought in domestic courts. On the other hand, if states take part in commercial activities like any other private corporation and thereby cause greenhouse gas emissions, these activities can be the subject-matter of a civil lawsuit, and this may take place in a foreign forum. As the relevant US legislation states in clear terms: “A foreign state shall not be immune from the jurisdiction of courts of the United States or of the States in any case […] (2) in which the action is based upon a commercial activity carried on in the United States by the foreign state; or upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere; or upon an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States.”24

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bb) Claims against state-owned corporations. Furthermore, emissions will often be generated by state-owned or state-controlled companies.25 In many countries, the state will at least hold shares in the country’s large fossil energy-producing or -consuming corporations. Generally speaking, such companies, being separate legal entities, do not enjoy immunity.26 However, some of the legal sources cited above, sub a), may suggest that entities other than the state itself might nevertheless enjoy immunity: Article 2 (1) (b) (iii) of the United Nations Convention on Jurisdictional Immunities of States and Their Property (2004), which, although not binding, may be used as a source of international customary law, includes in its definition of states “agencies or instrumentalities or other entities, to the extent that they are entitled to perform and are actually performing acts in the exercise of sovereign authority of the State”.27 Similarly, Art. 14 (2) of the UK State Immunity Act 1978 grants immunity to “separate entities” (referring to an entity “which is distinct from the executive organs of the government of the State and capable of suing or being sued”; see Art. 14 section 1) if “(a) the proceedings relate to anything done by it in the exercise of sovereign authority; and (b) the circumstances are such that a State […] 21

Cf in greater detail Cheshire/North/Fawcett, Private International Law, 2017, pp. 498 et seq. Cf 28 U.S. Code § 1605: General exceptions to the jurisdictional immunity of a foreign state. Hoge Raad, The State of the Netherlands v. Urgenda Foundation, 20.12.2019, ECLI:NL:HR:2019:2006; as to the decision of the lower instance (Gerechtshof Den Haag) cf Wegener, ZUR 2019, 3. For actions against states cf generally Fonbaustier, La Semaine juridique éd. Générale, 2019, étude 615 (p. 1100 et seq.). 24 Cf 28 U.S. Code § 1605: General exceptions to the jurisdictional immunity of a foreign state. 25 Cf the list of the world’s 20 most important polluters, as investigated by The Guardian in October 2019 (https://www.theguardian.com/environment/2019/oct/09/revealed-20-firms-third-carbon-emissions?) of which twelve are state-owned. 26 Dutta, p. 62. 27 Cf also Queirolo, in: Encyclopedia of Private International Law Vol. II, 896 (898). 22 23

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would have been so immune”.28 Where these or similar rules are applicable, immunity cannot be denied solely on the grounds that the company is a separate legal entity. Yet, again, the extraction or processing of fossil energy or the production of fossil energy-consuming equipment will practically always be a commercial activity, even if the ultimate goal might be, for example, to finance the state’s budget or support the power supply necessary for a state’s economy. The fact that the activities of the stateowned companies are of a commercial nature is also not negated by the fact that they are sometimes carried out or enforced against the will of the local population through military or police authority.29 In sum, legal suits against states or state corporations as emitters of greenhouse gases are usually not barred by immunity.

2. “Political question doctrine” as a limitation to cross-border proceedings As explained sub 1. b) aa), civil law claims against foreign states trying to force the 10 states to adopt stricter regulations in order to reduce global warming will be barred by the doctrine of immunity, while claims against foreign corporations will not. However, such private claims can have an indirect impact on the public policy of the state in which the emitters are located. Especially in the US, courts have tended to use the “political question doctrine” and the principle of separation of powers30 in order to deny the admissibility of civil law claims against fossil energy producers.31 In a cross-border case, one could therefore argue that the decision of a court in State A awarding damages because of greenhouse gas emissions caused by corporations located in State B amounted to an interference in the foreign policy of the forum state (State A), which should be left to the legislative and/or executive branches of the forum state’s political system. Courts could therefore be tempted to deny their ability to adjudicate in such cases. However, this line of argument is unconvincing. If it were to be followed, hardly any cross-border civil law litigation for torts committed abroad would be admissible, since every award of damages or compensation for acts or omissions committed abroad necessarily involves a verdict on the legality of such acts or omissions that is measured against the substantive rules of the applicable law. Awarding damages in cases of tortious liability, also in cross-border cases, is undoubtedly one of the original functions of civilian courts. The fact that large-scale cross-border litigation may also have a certain impact on foreign policy relations between the forum state and the home state of the defendant(s) is normal and cannot bar the judiciary from carrying out its proper functions.32

III. Jurisdiction 1. Introduction a) Meaning and relevance of international jurisdiction. International jurisdiction 11 deals with the question which states’ courts are competent to hear a case that has one or several cross-border-element(s). This question is often of crucial significance, since jurisdiction determines the place and language of the court proceedings and, above all, the applicable rules of procedure, i.e. the respective roles (and presence) of judge and jury; the availability of class actions or other instruments of collective redress; the rules In greater detail Dicey/Morris/Collins, The Conflict of Laws Vol. I, 15th ed., 2012, mn. 10–009. Doe v. Unocal Corp., Ninth Circuit Court of Appeals, 18.9.2002, 395 F.3d 932. 30 As to the role of courts in climate protection generally, cf the contribution by Payandeh, Part 1, C. 31 Cf in greater detail Gerrard, Climate Change Litigation in the USA, in this volume. 32 In the same vein Dutta, p. 63. 28 29

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on evidence; and the availability of pre-trial discovery. It also determines the cost of the lawsuit and the rules on cost allocation (i.e. whether the unsuccessful party bears not only its own costs, but also the cost of its opponent’s legal representation). Finally, in the absence of harmonised or uniform rules on conflict of laws, international jurisdiction will also determine the applicable conflict rules (lex fori principle) and hence the substantive law which will be applied to the facts.33 12

b) Connection with recognition and enforcement. In the absence of choice of court agreements between the parties, jurisdiction in climate change litigation cases will mostly be non-exclusive so that the plaintiff may choose between two or more possible fora. Apart from the factors that have just been mentioned, the chances of recognition and enforcement should play a key role in deciding where an action should be brought. Unlike arbitral awards, where the highly successful New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) guarantees recognition and enforcement in more than 160 states, judgements by state courts are only granted easy and swift cross-border recognition and enforcement among EU Member States (see Arts. 36 et seq. Brussels Ibis Reg.), and to a slightly lesser extent among the contracting states of the Lugano Convention (see Arts. 33 et seq.).34 The Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters 2019, which will be a considerable step forward, was just concluded on 2 July 2019 and is not yet in force. Where no multilateral basis for cross-border recognition and enforcement exists, parties will have to consult bilateral treaties and the autonomous national rules of each state in which recognition and enforcement is sought. In Germany, for example, these are §§ 328 and 722, 723 ZPO. If difficulties with respect to recognition and enforcement are to be avoided, suits for the payment of damages should only be brought in a state where the defendant has patrimony equal to the potential damages; suits for acts or omissions on the side of the defendant should be brought in front of courts which can de facto reach the defendant via an injunction or penalty.

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c) Overview of legal sources. There is to date no generally applicable international treaty on jurisdiction. The 2005 Hague Convention on Choice of Court Agreements (in force since 1.10.2015) is limited, as the title suggests, to jurisdiction on the basis of contractual agreements between the litigants. In addition, Art. 2 (2) excludes from its ambit “(j) claims for personal injury brought by or on behalf of natural persons” as well as “(k) tort or delict claims for damage to tangible property that do not arise from a contractual relationship”. Typical climate change litigation based on an alleged, present or future damage to the lives, health and/or property of individuals therefore falls outside the scope of the 2005 convention. The Hague Convention of 2 July 2019 is limited to recognition and enforcement (and is not yet in force). Within the EU, jurisdiction has been unified since 1968, first by the Brussels Convention and then, in 2001 and 2012, by the Brussels I and Ibis (or Brussels I recast) regulations.35 The following references are to the current, 2012 Brussels Ibis Regulation (No. 1215/2012). The Lugano Convention (2007) between the EU, Denmark, Norway, Switzerland and Iceland mirrors to a large extent the 2001 Brussels I Regulation and is to be interpreted in line with the jurisprudence of the CJEU on the regulation; see Protocol No. 2 on the Uniform Interpretation of the Lugano Convention. The UK has 33

Van Loon, ULR (2018), 298 (305 et seq.). The Brussels I Reg. of 2012 has abolished the necessity of a separate exequatur, cf Art. 39 Brussels I Reg., whereas it still exists under the Lugano Convention, Arts. 38 et seq. 35 For a brief account of the legislative history cf Bogdan/Pertegás Sender, Concise Introduction to EU Private International Law, 4th ed. 2019, p. 5 et seq. 34

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signalled its willingness to accede to the Lugano Convention in its own right once the transition period after Brexit will have expired on 31 December 2020.36 In the absence of any applicable multilateral or bilateral treaty, each state is free to follow its own principles and rules on jurisdiction. States have no duty arising from public international law or customary law to open their national courts for international litigation.37

2. Brussels Ibis Regulation and Lugano Convention a) Applicability. aa) Subject matter must be “civil and/or commercial”. The 14 jurisdictional rules of the Brussels Ibis Regulation and of the Lugano Convention apply where the subject matter of the lawsuit is civil and/or commercial, whatever the nature of the court or tribunal (Art. 1 (1) Brussels Ibis Reg. and Lugano Convention). Climate change litigation for damages in case of injuries to health or property and for financing protective measures (i.e. protection against floods, droughts, etc.) against companies that engage in fossil energy extraction or consumption is clearly a “civil” matter within the meaning of Art. 1 (1). For actions against states with a view to a stricter climate protection policy, see supra II. 1. b). These will regularly fall into the category of “acta iure imperii” and therefore remain outside the ambit of the Brussels Ibis Reg. and the Lugano Convention. bb) Personal applicability. As a matter of principle, the defendant must be dom- 15 iciled in one of the Member States of the EU38 or contracting states of the Lugano Convention39 (Arts. 4 (1) and 6 (1) Brussels Ibis Reg. and Arts. 2 (1) and 4 (1) Lugano Conv.). For determining the domicile of natural persons, courts will apply their domestic law (Art. 62 Brussels Ibis, 59 Lugano Convention); however, for companies or other legal persons, the instruments define the notion of “domicile” autonomously as the place where its statutory seat (in the UK, Ireland and Cyprus: registered office), central administration or principal place of business is located (Art. 63 Brussel Ibis, Art. 60 Lugano Conv.). If the defendant is domiciled in a third state, the Regulation can still apply in litigation arising from consumer or employment contracts (Art. 18 s.1, Art. 21 s. 2); in case of a choice of court agreement (Art. 25); or where an exclusive jurisdiction exists under Art. 24. However, none of these alternatives is practically relevant in climate change litigation, since the European Court of Justice (CJEU) refused to apply Art. 24 no. 1 (at the time of the decision still Art. 16 no. 1 Brussels Convention) to a case where cross-border emissions from a nuclear power plant situated in a third state affected immovable property situated in the EU.40 Therefore, if the defendant is domiciled in a third state, Member States’ courts will usually apply their domestic rules on international jurisdiction. cc) Application in time. Since 1968, there have been various versions of the Brussels 16 and Lugano conventions and of the Brussels Regulation; therefore, when the lawsuit began must be taken into account. If the suit was filed after 10 January 2015, the 36 Cf https://www.gov.uk/government/news/support-for-the-uks-intent-to-accede-to-the-lugano-convention-2007 (last viewed on 17.2.2020). 37 Dutta, p. 47 with further references. 38 The UK remains to a Member State until 31 December 2020. For future perspectives cf fn. 36 and accompanying text. Denmark is not a Member State for the purposes of the Brussels and Rome Regulation since it does not take part in measures under Arts. 81 et seq. TFEU. However, Denmark is bound to the Brussels I Reg. (2001) through a separate bilateral treaty with the EU, in force since 1 July 2007, cf OJ 2007 L 94/70. 39 Dasser, in: Dasser/Oberhammer, Lugano Übereinkommen, 2nd ed., 2011, Art. 2 mn. 10. 40 ECJ Case C-343/04 Land Oberösterreich v ČEZ a.s. [2006] ECR I-4586.

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Brussels Ibis Regulation applies (Arts. 66 and 81 Brussels Ibis Reg.). For the Lugano Convention, the relevant time has to be fixed individually for each contracting state (Art. 63 (1) Lugano Conv.). b) General jurisdiction at the defendant’s domicile: Art. 4 (1) Brussels Ibis Reg. Article 4 (1) Brussels Ibis Reg. (= Art. 2 (1) Lugano Conv.) renders the courts of the Member State where a company is domiciled competent for all civil or commercial suits against the company. Due to the alternative definitions of the company’s seat in Art. 63 Brussels Ibis Regulation/Art. 60 Lugano Conv., see supra, a) bb), plaintiffs can choose whether they want to sue the company at its statutory seat, its central administration or its principal place of business if those are situated in different Member States. The general jurisdiction according to Art. 4 Brussels Ibis is mandatory and cannot be rejected by Member States’ courts on the basis of a “triable issue” or “good cause of action” test.41 According to the jurisprudence of the CJEU (Owusu),42 there is also no room for the doctrine of forum non conveniens.43 In the same cause célèbre, the court held that Art. 4 (1) Brussels Regulation could be applied, although both the defendant and the plaintiff were domiciled in the same Member State and the only cross-border element (in casu the place where the harm occurred) connected the case with a third state.44 18 It follows from this jurisprudence that a company that is deemed to be responsible for greenhouse gas emissions and that has its statutory seat, central administration or principal place of business in a Member State can be sued according to Art. 4 (1) Brussels Ibis Reg. for its global activities and for the global damages caused by them. Theoretically, it remains possible to raise the defence of an “abuse of EU law”, but in the context of Art. 4 Brussels Ibis Reg., the threshold is extremely high and practically insurmountable.45 It must, however, be kept in mind that Art. 4 (1) Brussels Reg./Art. 2 (1) Lugano Convention only covers lawsuits filed against the company itself, as a separate legal entity. Neither the Brussels Reg. nor the Lugano Convention embraces the idea of a joint or single forum for suits against groups of companies (“enterprise jurisdiction”, Konzerngerichtsstand). If the plaintiff wants to combine proceedings against a parent company and its (foreign) subsidiaries, jurisdiction has to be established for each defendant separately (but see below, (d), for joint claims). 17

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c) Special jurisdiction for actions in tort: Article 7 No. 2 Brussels Ibis Regulation. aa) CJEU: Place where the harmful event occurred or location of damage. Of the various headings under which Arts. 7–9 Brussels Ibis confer special (or “specific”) jurisdiction, Art. 7 No. 2 is particularly pertinent in the context of climate change litigation. Note, however, that its applicability always presupposes that the defendant is 41

Van Lith, in: Dickinson/Lein (eds.), The Brussels I Regulation Recast, 2015, mn. 3.08 et seq. ECJ Case C-281/02 Andrew Owusu v N. B. Jackson and others [2005] ECR I-01383. = IPRax 2005, 244 with case note by Heinze/Dutta. 43 Cf Cheshire/North/Fawcett, Private International Law, pp. 462–464. “Owusu” and the exclusion of forum non conveniens is also respected under the Lugano Convention, cf Dasser, in: Dasser/Oberhammer, Lugano Übereinkommen, Art. 2 mn. 18. Therefore, should the UK become a party to Lugano after the end of the transition period (supra fn. 36), its courts could not return to applying this doctrine. 44 ECJ, Andrew Owusu v N. B. Jackson and others (fn. 42). For the parallel jurisprudence of the Swiss Bundesgericht with respect to the Lugano Convention (BGE 135 III 185 E. 3.3.), cf also Dasser in: Dasser/ Oberhammer, Lugano Übereinkommen, Art. 2 mn. 10 with further references. 45 Cf UK Supreme Court 10.4.2019 – [2019] UKSC 20, Vedanta v Lungowe, mn. 31–34 (per Lord Briggs); Lehmann/Eichel, RabelsZ (2019), 77 (89); Hess/Mantovani, Current developments in forum access: comments on jurisdiction and forum non conveniens, Max-Planck Institute Luxembourg for Procedural Law, Research Paper Series 2019 (1) at fn. 90 (available at https://papers.ssrn.com/abstract=3325711). 42

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domiciled in another EU Member State (see supra, a) (ii)). Art. 7 No. 2 Brussels Ibis (= Art. 5 s. 3 Lugano Convention) embraces claims for tortious liability, both for damages and for protective measures against future infringements, since the wording refers explicitly to the “place where the harmful event occurred or may occur”.46 With relation to the definition of the place where the harmful event occurred, the CJEU has held ever since its famous decision in Bier/Mines de Potasse47 that it is both the place where the defendant acted and the place where the damage or the injury occurred. The plaintiff therefore has a right to forum shopping. In this particular case, a mining company located in France had allowed polluted water to flow into the Rhine, subsequently damaging the property of a Dutch farmer. The court held that the farmer could bring his suit either in France, where the defendant was located and where it had acted (or neglected to act), or in the Netherlands, where the plaintiff’s property had been adversely affected. If one applies this reasoning to climate change litigation, tortfeasors clearly face the 20 danger of being sued in every Member State, since the adverse effects of greenhouse gas emissions do not stop at national borders and can through an adverse effect on the climate, cause damage to health and property everywhere. Of course, the rules on lis pendens would prevent parallel proceedings (see Arts. 29 et seq. Brussels Ibis Regulation), but plaintiffs could still shop for the best available forum. bb) CJEU: Multi-state torts. In cases involving the infringement of personality rights 21 through mass media and the internet, the CJEU has employed different techniques in order to limit the number of possibly competent fora: in the older Shevill case, where a newspaper publisher in France infringed the rights of a person domiciled in England, the court limited the amount of damages which the plaintiff could possibly recover in England to the sum that was proportionate to the number of newspapers of that particular issue that were sold in England. The plaintiff could only sue for the full amount at the domicile of the publisher. In a more recent decision (eDate Advertising),48 where the infringement occurred through an article published on the internet (which made the calculation of the infringements for each individual jurisdiction where the article was potentially visible rather difficult, if not impossible), the Court held that the full amount of damages could either be claimed at the domicile of the tortfeasor or, alternatively, be claimed under Art. 7 No. 2 Brussels Ibis Reg. at the place where the injured person had the centre of his or her interests, thus equating the place of the damage with the victim’s habitual place of residence. cc) Application to climate change litigation. With respect to claims for damages 22 because of climate change-related natural events, such as storms, droughts, floods, heatwaves, etc., courts could face a similar question: Can a company that causes greenhouse gas emissions be sued in all Member States where its activities have had or can have a detrimental effect on the plaintiffs’ life, health or property? Does the (potential) tortfeasor need protection against forum shopping? Lehmann and Eichel, in a recent publication, in fact hold that defendants in climate change litigation need protection against the danger of potentially global and therefore unforeseeable lawsuits.49 They suggest that instead of limiting jurisdiction by requiring a causal link (which in their 46 Cf Cheshire/North/Fawcett, Private International Law, p. 270; Mankowski, in: Magnus/Mankowski, Brussels Ibis Regulation, Art. 7 mn. 395; Lein, in: Dickinson/Lein (eds.), The Brussels I Regulation Recast, mn. 4.69 et seq. 47 ECJ Case C-21/76 Handelskwekerij G. J. Bier BV v Mines de potasse d’Alsace SA [1976] ECR I-01735. 48 ECJ Cases C-509/09 and C-161/10 eDate Advertising GmbH v X [2011] ECR I-10269 (case note W.-H. Roth, IPRax 2013, 215). 49 Lehmann/Eichel, RabelsZ (2019), 77 (90 et seq.).

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view would burden the decision on jurisdiction with a discussion of the merits) or by making foreseeability a criterion (as in Art. 5 Rome II Regulation with respect to product liability), a distinction between direct and indirect damage should be introduced, following the CJEU’s judgment in Lazar/Allianz.50 Since most damage through global warming is indirect, meaning that a storm or other change of natural circumstances must first be triggered through global warming before actual damage to health, life or property will occur, all damage would be too indirect to link the damage to a given forum. As a result, in their view, companies that are said to have contributed to global warming can only effectively be sued at their seat or at the place where the act giving rise to the damage occurred – a place which will usually coincide with the company’s central administration or principal place of business. Consequently, in the view of these authors, there will be no alternative special jurisdiction for tortious liability in climate change litigation cases. 23 Comment: In the present author’s view, this line of argument is unconvincing. First of all, one may question whether the jurisprudence of the CJEU, which was developed for multi-state infringements of personality rights, may be transferred as a whole to other multi-state delicts. With respect to such infringements, courts have to weigh the constitutional rights of journalists, publishing houses and the public (i.e. freedom of speech and freedom of information) against the protection of personality rights.51 Given the fact that Member States hold very different views on balancing these interests –so different, in fact, that the matter was even left out of the Rome II Regulation (see Art. 1 (2) (g)) – it is unsurprising that the CJEU felt that it should protect publishing houses against their potential answerability in all Member States in which an article was somehow available. In contrast, there is no reason why greenhouse gas emitters should need such special protection. They are usually equipped with the financial means to protect their legal and commercial interests in a number of different fora; whether the standards of liability will grossly differ from one jurisdiction to another (as they do with respect to the protection of personality rights) is still to be seen. Victims of cross-border torts should not have their right to choose an appropriate forum limited and lose the ability to make use of their right to forum shopping under the Bier/Mines de Potasse case, just because this may lead to a choice that is not in the best interest of the emitters. In contrast, the fact that damage due to climate change does in fact only occur where it triggers some natural event such as storms, etc., makes it inherently difficult for the plaintiff to prove the causal link between the act (or omission) and the damage. This fact should therefore not be used in addition to hinder the plaintiffs’ chance to choose a forum where the jurisprudence of the CJEU allows them to do so. Even in the Bier case, the property of the Dutch farmer was not directly damaged through the actions of the French mine; rather, the pollution only came to the farmer’s land because he himself used or planned to use the water from the Rhine for his plants. 24 Even if one subscribes to the idea that the CJEU’s jurisprudence in Shevill and eDate Advertising is not limited to violations of personality rights by the media, but can or must be extended to all multi-state torts,52 such an application does not lead to a complete denial of the plaintiff’s right to sue in the specific forum prescribed by Art. 7 No. 2 Brussels Ibis Reg./Art. 5 No. 3 Lugano Convention. Rather, it follows from eDate Advertising53 that the victims of multi-state injuries do have a right to sue for the full 50

ECJ Case C-350/14 Florin Lazar v. Allianz SpA [2015] ECLI:EU:C:2015:802. Cf foremost the famous Fiona Shevill case: ECJ Case C-68/93 Fiona Shevill v Presse Alliance SA [1995] ECR I-00415. 52 Cf for example Oberhammer, in: Dasser/Oberhammer, Lugano Übereinkommen, Art. 5 mn. 121. 53 Supra fn. 48. 51

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amount of damages sustained where their interests are primarily affected, which – in cases involving personality rights – was held to be their habitual residence. Following this line of jurisprudence, victims of natural events triggered by climate change must at least be allowed to choose between bringing an action at the tortfeasor’s domicile and suing for damages or protective measures in those states where their lives, health or property are affected, i.e. at their habitual residence. Finally, even under the CJEU’s “mosaic” approach in Shevill,54 the plaintiffs could still institute proceedings in their home jurisdiction with respect to that part of the overall damage that has occurred or might occur in the future within the forum state. They are only barred from suing the defendant company at an individual locus damni for EU-wide damage or protective measures.55 This view is supported (and not contradicted, as Lehmann and Eichel suggest) by 25 Recitals 16 and 17 of the Rome II Regulation, which the CJEU cited approvingly in Lazar:56 “(16) Uniform rules should enhance the foreseeability of court decisions and ensure a reasonable balance between the interests of the person claimed to be liable and the person who has sustained damage. A connection with the country where the direct damage occurred (“lex loci damni”) strikes a fair balance between the interests of the person claimed to be liable and the person sustaining the damage, and also reflects the modern approach to civil liability and the development of systems of strict liability. (17) The law applicable should be determined on the basis of where the damage occurs, regardless of the country or countries in which the indirect consequences could occur. Accordingly, in cases of personal injury or damage to property, the country in which the damage occurs should be the country where the injury was sustained or the property was damaged respectively.” Clearly, therefore, the place where victims of climate change may suffer personal injury or damage to their property is not too remote, indirect or unforeseeable; instead, it constitutes a suitable forum for an action in tort under Art. 7 No. 2 Brussels Ibis Regulation. There is no need to reduce that forum’s effectiveness to zero through a criterion of “directness” which is nowhere reflected in either the wording of Art. 7 No. 2 itself or in the jurisprudence of the CJEU.57 d) Special jurisdiction for joint claims against domestic anchor defendant and 26 foreign subsidiary. Article 8 No. 1 Brussels Ibis Regulation (= Art. 6 No. 1 Lugano Convention) makes it possible to sue a co-defendant together with a so-called “anchor defendant”, “provided the claims are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings”. According to the CJEU in Painer/Standard, the merits of the cases against all co-defendants do not need to be judged according to the same applicable law.58 However, in order to avoid misuse of the provision, the anchor defendant must be sued under his or her general head of jurisdiction (Art. 4 s. 1 Brussels Ibis Reg.).59 The provision does only apply to co-defendants who are them54

Supra fn. 48. Mankowski, in: Magnus/Mankowski, Brussels Ibis Regulation, Art. 7 mn. 257; Bogdan/Pertegás Sender, Concise Introduction to EU Private International Law, p. 48 et seq. 56 Supra fn. 50. 57 In the Lazar case (fn. 50), the ECJ held that the damage to the health of the father of the victim of a road accident, which happened in Italy, was an indirect damage within the meaning of Art. 4 (1) Rome II Regulation. This led to the law applicable to the tortious liability as a whole being determined by the place where the accident had occurred. The case did not deal with jurisdiction and can therefore not be cited to deny a victim’s right to sue at his or her domicile because of damage to his or her health. 58 ECJ Case C-145/10 Eva-Maria Painer v Standard VerlagsGmbH and Others [2011] ECR I-12533; cf Cheshire/North/Fawcett, Private International Law, p. 285. 59 ECJ Case C 51/97 Réunion européenne SA and Others v Spliethoff’s Bevrachtingskantoor BV and the Master of the vessel Alblasgracht V002 [1998] ECR I-06511; BGH 24.2.2015, NJW 2015, 2429. 55

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selves domiciled within the EU. If a plaintiff wants to bring a joint lawsuit against a parent company domiciled in the EU and its third-state subsidiary, he or she must include the latter on the basis of autonomous national law, if applicable. There has been some discussion in English courts as to whether Art. 8 (1) Brussels Ibis Reg. also requires that the case against the anchor defendant have a “good cause of action” or a “triable issue”, in order to avoid use of the provision as a mere vehicle for suing the codefendants outside of their general jurisdiction.60 27 In climate change litigation, Art. 8 No. 1 Brussels Ibis Reg. can be used to bring a suit against a parent company located in one Member State, in accordance with the criteria in Art. 63 Brussels Ibis Reg., as well as actions against its subsidiaries located in various other Member States. If the co-defendants’ commercial activity and potential impact on climate change is identical, the prerequisites of Art. 8 No. 1 Brussels Ibis Reg. will be met. This is true even if the concrete damage that has occurred or that can occur at the co-defendants’ different places of business is not identical due to differences in the natural environment of the various Member States.

3. EU Member States’ autonomous rules on jurisdiction 28

If according to Art. 63 Brussels Ibis Reg. the defendant company’s domicile is not located in a Member State, Member States’ courts will determine their jurisdiction according to the autonomous national lex fori. Different heads of jurisdiction can become practically relevant, as will be shown below.

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a) Place of damage for liability in tort. Where the lex fori allows claims to be brought under national rules at the place where the damage occurred, victims of damage related to climate change may bring an action in tort at the place where their health or property has been adversely affected. This will usually be their domicile. Such a rule can be found in, for example, § 32 ZPO (Germany), since German courts consider both the place where the tortious act was committed and the place of the injury to be relevant.61

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b) Joint action against EU parent company and third-state subsidiary. Joint claims against a parent company domiciled in the EU (or a contracting state of the Lugano Convention) and a subsidiary domiciled in a third state represent another practically relevant scenario where domestic heads of jurisdiction come into play. While jurisdiction for the suit against the parent company may be founded on Art. 4 Brussels Ibis Reg/Art. 2 Lugano Convention, the third-state subsidiary, being a separate legal entity, cannot be sued under either Art. 4 Brussels Ibis Reg (Art. 2 Lugano Convention) or Art. 8 No. 1 Brussels Ibis Reg (Art. 6 No. 1 Lugano Convention). Some Member States have separate, autonomous rules under which it is possible to include the claim against the subsidiary in accordance with the standards set in Art. 8 No. 1 Brussels Reg.; see for example Art. 7 (1) of the Dutch Code of Civil Procedure.62 Others adopt a more restrictive approach and allow the courts a greater deal of discretion. Under English law, for example, the second defendant may be served outside the jurisdiction pursuant 60 Cf Cheshire/North/Fawcett, Private International Law, p. 287; Matthias Weller, Haftung englischer Konzernmütter für Delikte drittstaatlicher Töchter im Spiegel des zuständigkeitsrechtlichen Missbrauchseinwands, in: Hess/Jayme/Mansel (eds.), Liber Amicorum Christian Kohler, 2018, p. 583 et seq. 61 Cf Toussaint, in: Vorwerk/Wolf (eds.), BeckOK ZPO, 35th Edition, 01.01.2020, mn. 12 with further references. 62 This head of jurisdiction was used in the famous Milieudefensie case, cf Gerechtshof Den Haag, Milieudefensie et al. v. Royal Dutch Shell plc., 18 December 2015, NL:GHDHA:2015:3586. Cf also Hess/ Mantovani, (fn. 45), text at fn. 105.

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to Part 6 Practice Direction B para 3.1. if the plaintiff can show that “(i) the claims against the anchor defendant involve a real issue to be tried; (ii) that it is reasonable for the court to try that issue; (iii) that the foreign defendant is a necessary or proper party to the claims against the anchor defendant; (iv) that the claims against the foreign defendant have a real prospect of success; (v) that, either, England is the proper place in which to bring the combined claims or that there is a real risk that the claimants will not obtain substantial justice in the alternative foreign jurisdiction, even if it would otherwise have been the proper place, or the convenient or natural forum.”63 However, a third group of Member States (including, for example, Germany) does not have any autonomous rules on joint claims against third-state defendants at all. c) Exorbitant heads of jurisdiction. Furthermore, defendants domiciled in third 31 states can be sued under so-called “exorbitant heads of jurisdiction”, as mentioned in Art. 6 (2) and Art. 76 (1) (a) Brussels Ibis Reg.64 For example, in Germany, § 23 ZPO allows defendants located in third states to be sued before German courts if they have patrimony located within Germany, such as an account with a German bank.65 It is not necessary that the patrimony cover or equal the claim, but according to recent jurisprudence of the Bundesgerichtshof, the patrimony must at least cover the possible cost of execution.66 Whereas exorbitant heads of jurisdiction have been abolished between Member States, each person domiciled within a Member State can make use of that Member State’s exorbitant heads of jurisdiction in relation to third countries, irrespective of his or her nationality; see Art. 6 (2) Brussels Ibis Reg. (= Art. 4 (2) Lugano Convention).67

4. United States: Personal jurisdiction of state and federal courts Personal jurisdiction in US law is roughly equivalent to international jurisdiction in 32 European law.68 It is further divided into general jurisdiction (sub a) and specific jurisdiction (sub b).69 Where a court has general jurisdiction, it can adjudicate any claim, regardless of whether it is based on tort, property or any other legal foundation.70 In principle, rules on personal jurisdiction for interstate conflicts of jurisdiction are also applied to international cases.71 The US has a parallel system of state and federal courts; as a matter of principle, the state courts are competent (sub c). The jurisdiction of US courts is further subject to the doctrine of forum non conveniens (sub d). Implications for climate change litigation are summarised sub e). a) General jurisdiction. Traditionally, state enactments on jurisdiction (so-called 33 “long-arm statutes”) define personal jurisdiction (general and specific) in a broad and 63 Cf UK Supreme Court 10.4.2019 – [2019] UKSC 20, Vedanta v Lungowe, mn. 20 (per Lord Briggs); cf also Cheshire/North/Fawcett, Private International Law, pp. 335 et seq. 64 The list pursuant to Art. 76 (2) Brussels Ibis Regulation is published in OJ 2015 C 4/2. 65 § 23 sent. 2 ZPO states explicitly that a claim is located at the domicile of the debt. i.e. the bank. 66 BGH, Court Order of 22. September 2005, BGH-Report 2005, 1611 = BeckRS 2005, 11442; OLG Düsseldorf, BeckRS 2006, 1220; OLG Dresden NJW-RR 2007, 1145 (1146); OLG Frankfurt a. M., WM 2011, 2360 (2362); OLG München MDR 2015, 728; Schultzky, in: Zöller Zivilprozessordnung, § 23 ZPO, 33th ed., 2020, mn. 7. 67 Bogdan/Pertegás Sender, Concise Introduction to EU Private International Law, p. 41; van Lith, in: Dickinson/Lein (eds.), The Brussels I Regulation Recast, mn. 3.31. 68 Zekoll/Schulz, RIW 2014, 321. Schack equates “international jurisdiction” to “territorial jurisdiction”, cf Schack, Einführung in das US-amerikanische Zivilprozessrecht, 4th ed., 2011, mn. 61. 69 Cf Hay/Borchers/Symeonides/Whytock, Conflict of Laws, 6th ed., 2018, § 5.10. 70 Zekoll/Schulz, RIW 2014, 321 (322). 71 Schack, Einführung in das US-amerikanische Zivilprozessrecht, mn. 61.

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far-reaching way.72 They also apply to federal courts sitting in the same state.73 But since these acts are subject to the constitutional guarantee of due process (5th and 14th Amendments to the US Constitution),74 determination of jurisdiction in the US is a two-step process,75 in which the second step is largely a matter of case law.76 In International Shoe Company v. Washington,77 the Supreme Court held that general jurisdiction was not strictly limited to defendants who were physically present in the jurisdiction; therefore, corporations could be considered to be “present” in all states in which they engaged in “continuous and systematic business activity”.78 In two further cases, the Supreme Court confirmed that, as a matter of principle, a foreign corporation could be sued in the US if it had “continuous and systematic contacts” with the forum state.79 Generally speaking, it was held sufficient that the foreign corporation be “doing business” in the United States.80 Yet, since 2014, the Supreme Court has adopted a far more restrictive approach. In Goodyear v. Brown,81 the relatives of individuals from North Carolina who were the victims of a road accident in France sued the US parent company and some of its European subsidiaries in North Carolina for damages. While the lower instances assumed general jurisdiction, the Supreme Court denied it and held that “a court may assert general jurisdiction over foreign (sister-state or foreign-country) corporations to hear any and all claims against them when their affiliations with the State are so continuous and systematic as to render them essentially at home in the forum state.”82 Corporations are clearly “at home” where they have their place of incorporation and/or their principal place of business.83 Outside these criteria, general jurisdiction can 72 Hay/Borchers/Symeonides/Whytock, Conflict of Laws, § 5.14. Cf for example § 302 (a) of the Civil Practice Law and Rules of New York: “Acts which are the basis of jurisdiction: As to a cause of action arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any non-domiciliary, or his executor or administrator, who in person or through an agent: 1. transacts any business within the state or contracts anywhere to supply goods or services in the state; or 2. commits a tortious act within the state, except as to a cause of action for defamation of character arising from the act; or 3. commits a tortious act without the state causing injury to person or property within the state, except as to a cause of action for defamation of character arising from the act, if he (i) regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in the state, or (ii) expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce; or 4. owns, uses or possesses any real property situated within the state.” 73 Rule 4(k) (1) (A) of the Federal Rules of Civil Procedure; cf also Hay/Borchers/Symeonides/ Whytock, Conflict of Laws, § 5.15. 74 Hay/Borchers/Symeonides/Whytock, Conflict of Laws, § 5.1. The 5th Amendment relates to the jurisdiction of federal courts, the 14th Amendment is applied to state courts. 75 Hay/Borchers/Symeonides/Whytock, Conflict of Laws, § 5.14. 76 Cf Brand, 60 U.Pitt.L.Rev. 661 (1999); Brand, Comparative Method and International Litigation, University of Pittsburgh Faculty of Law, Legal Studies Research Paper Series, Working Paper no. 2020–03, available at ssrn.com, p. 21 et seq. 77 International Shoe Company v. Washington, 326 U.S. 310 (1945). 78 Hay/Borchers/Symeonides/Whytock, Conflict of Laws, § 5.4. 79 In Perkins v. Benguet Consol. Mining Co., 342 U.S. 437 (1952) the Supreme Court held that the courts in the US had general jurisdiction over a corporation domiciled in the Philippines since its CEO and main shareholder was resident in Ohio during the relevant time and ran an office there. In contrast, the Supreme Court denied jurisdiction in Helicopteros Nacionales de Colombia S.A. v. Hall, 466 U.S. 408 (1984) since in that case, the defendant company being sued because of a helicopter crash in Peru had merely purchased some products and services in Texas that were unrelated to the accident. 80 Zekoll/Schulz, RIW 2014, 321 (323). 81 Goodyear Dunlop Tyres, S.A. v. Brown, 131 S.Ct. 2846 (2011). 82 Goodyear Dunlop Tyres, S.A. v. Brown, 131 S.Ct. 2846 (2011) 2851. 83 Goodyear Dunlop Tyres, S.A. v. Brown, 131 S.Ct. 2846 (2011) 2853 et seq.; Hay/Borchers/Symeonides/Whytock, Conflict of Laws, § 5.13 conclude with these words: “Although [the Supreme Court]

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only be assumed in exceptional circumstances. These were not present in either Goodyear v. Brown or in the subsequent case of Daimler v. Baumann,84 where the plaintiffs, 22 Argentine nationals, sued the Argentine subsidiary of Daimler in Texas because of human rights’ violations which were said to have occurred during the military dictatorship in Argentina. The Supreme Court denied general jurisdiction of the US courts over the parent company, holding that although, as a matter of principle, general jurisdiction could be established even against a corporation which had neither its place of incorporation nor its principal place of business within the state, the plaintiffs could not demonstrate other circumstances which made the defendants “essentially at home” in Texas.85 As a consequence of these two recent decisions, it seems safe to state that in a case where a foreign plaintiff sues a foreign corporation because of an alleged wrong committed in a foreign state, US courts will deny general jurisdiction.86 b) Specific jurisdiction. Most “long-arm” statutes provide for specific jurisdiction for 34 actions in tort,87 but their use is again limited by due process. The Supreme Court recently stressed that specific jurisdiction for tort must still be viewed from the perspective of protecting the defendant and that it therefore only exists where the defendant’s acts connect him to the forum; the fact that the victim suffered damage in the forum state is by itself not sufficient to establish specific jurisdiction.88 Furthermore, in the 2017 decision of Brystol-Myers Squibb Co. v. Superior Court of California, the Supreme Court held that victims who were not resident in California could not sue a pharmaceutical company for damages. For personal jurisdiction, they could not rely on the fact that the company had employees and carried out a substantial part of its business in that state.89 This decision is regarded as limiting specific jurisdiction even further, especially for joint suits brought by state residents and non-residents together.90 In cases of statutory liability for environmental harm, out-of-state defendants can be 35 sued in the state in which the harm occurred.91 However, the line of cases which suggest this rule92 is limited to situations where the harm to the environment was directly caused by the activities of the defendant. It therefore seems doubtful whether it can be relied on for climate change litigation. In the still-pending litigation of City of Oakland and the People of California v. BP PLC and others,93 the District Court for the Northern disclaims the view that general jurisdiction exists only in a corporation’s principal place of business (and probably its state of incorporation) there is little to give one confidence that other forums with unrelated contacts are available. At the very least, it appears that such additional forums – if they exist at all – will have to approach the Perkins paradigm of the locus of important corporate decisions.” 84 Daimler AG v. Bauman, 134 S.Ct. 746 (2014). 85 Daimler AG v. Bauman, 134 S.Ct. 746 (2014), 761. 86 Van Loon, ULR (2018), 298 (307); Zekoll/Schulz, RIW 2014, 321 (327). 87 Cf fn. 72. 88 Walden v. Fiore et al., 25, 134 S.Ct. 1115 (2014); J. McIntyre Machinery, Ltd. v. Nicastro, 131 S.Ct. 2780 (2011); van Loon, ULR (2018), 298 (307); Hay/Borchers/Symeonides/Whytock, Conflict of Laws, § 7.4.: “The mere fact that a defendant’s negligent action is alleged to have caused effect or injury in the forum state does not, by itself, satisfy the minimum contacts test. Specific jurisdiction in a negligence case can be constitutionally established only through forum state conduct or effects and some purposeful effort on the part of the defendant, to affiliate with the state, […].” 89 Brystol-Myers Squibb Co. v. Superior Court of California, 582 U.S. (2017) Justice Sotomayor dissenting. 90 Van Loon, ULR (2018), 298 (307, fn. 37). 91 Cf Hay/Borchers/Symeonides/Whytock, Conflict of Laws, § 9.2. 92 Ohio v. Wyandotte Chemicals Corp., 401 US.S. 493; Branch Metal Processing, Inc. v. Boston Edison Co., 952 F.Supp. 893. 93 Cf City of Oakland and the People of the State of California v. BP, Chevron and others, order granting motions to dismiss for lack of personal jurisdiction, District Court for the Northern District of California 27 July 2018 (http://blogs2.law.columbia.edu/climate-change-litigation/wp-content/uploads/sites/16/casedocuments/2018/20180727_docket-317-cv-06011_order-1.pdf. Accessed 10.3.2020).

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District of California in 2018 denied specific jurisdiction94 of the Californian courts over BP and Royal Dutch Shell as foreign companies – and also over the US companies of Exxon Mobile and ConocoPhillips, which are incorporated in New Jersey and Delaware, respectively, and have their principal paces of business in Texas. Citing Brystol-Myers Squibb Co. v. Superior Court of California and Axiom Foods, Inc. v. Acerchem Int’l, Inc.,95 the judge held the following three requirements to be decisive: “(1) the defendant must either purposefully direct his activities toward the forum or purposefully avail himself of the privileges of conducting activities in the forum; (2) the claim must be one which arises out of or relates to the defendant’s forum-related activities; and (3) the exercise of jurisdiction must comport with fair play and substantial justice, i.e. it must be reasonable.” Applying the second prong part of this test, the judge further tightened the criteria: the existence of a causal link between the activities and the claim required that the plaintiff’s alleged harm (here, the global warming-induced sea level rise) would not have occurred “but for” each defendant’s respective California-related activities.” From this starting point, specific jurisdiction was bound to be denied, since, as the Judge stated, “it is manifest that global warming would have continued in the absence of all California-related activities of defendants.” 36

c) Exorbitant heads of jurisdiction: Transient rule. The traditional common law rule that in-state service of the summons establishes general jurisdiction (the so-called “transient rule”) is still good law in the US.96 However, it only applies to individuals who have received the summons while physically present in the forum state. It does not apply to corporations. Therefore, jurisdiction over corporations cannot be founded upon service of the summons to a company’s directors.97 Hence for climate change litigation, the rule is irrelevant.

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d) Subject-matter jurisdiction: Alien Tort Statute. In principle, jurisdiction lies with the state courts, with access to the federal courts as the exception.98 Such access is granted if the litigation “arises under federal law”,99 if there is a “diversity of citizenship”,100 or if a special head of jurisdiction exists, such as the Alien Tort Statute (ATS) from 1787.101 From the 1980s onwards, the ATS has often been used to bring human rights litigation in front of US courts even when there is no or hardly any connection with the territory of

94 General jurisdiction was not at stake, since it was evident that the four companies were not domiciled in California. 95 Axiom Foods, Inc. v. Acerchem Int’l, Inc, 874 F. 3d 1064, 1068 (9th Cir. 2017). 96 Cf Hay/Borchers/Symeonides/Whytock, Conflict of Laws, § 6.2. 97 Hay/Borchers/Symeonides/Whytock, Conflict of Laws, § 6.2. 98 On the current question whether climate change litigation by Rhode Island against 60 fossil fuel companies will be treated by state or federal courts, cf http://climatecasechart.com/case/rhode-island-vchevron-corp/?cn-reloaded=1. 99 28 U.S. Code § 1331: The district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States. 100 28 U.S. Code § 1332: (a) The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between (1) citizens of different States; (2) citizens of a State and citizens or subjects of a foreign state, except that the district courts shall not have original jurisdiction under this subsection of an action between citizens of a State and citizens or subjects of a foreign state who are lawfully admitted for permanent residence in the United States and are domiciled in the same State; (3) citizens of different States and in which citizens or subjects of a foreign state are additional parties; and (4) a foreign state, defined in section 1603 (a) of this title, as plaintiff and citizens of a State or of different States. 101 28 U.S. Code § 1350: “The district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States.”

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the United States.102 However, in the famous Kiobel case of 2013,103 the Supreme Court effectively ended this practice.104 The court held that the ATS does not generally give access to the US courts for claims of foreign plaintiffs against foreign defendants for violations of human rights committed in a foreign country if other sufficient connections with the US are lacking. Kiobel was affirmed in Jesner v. Arab Bank, PLC.105 According to the Supreme Court, the fact that the defendant parent corporation owned a subsidiary that was incorporated in Delaware and had its principal place of business in New York was not considered to amount to a substantive connection with California, where the plaintiffs brought the suit. e) Forum non conveniens. Even if personal and subject-matter jurisdiction can be 38 established, US courts reserve their discretionary power to dismiss the claim on behalf of the plaintiff under the doctrine of forum non conveniens if there is another available forum that is clearly more appropriate.106 Although the doctrine may be defended as a mechanism for allocating adjudicative authority between countries,107 it has been heavily criticised for its practical application as a tool for generally insulating US-based transnational companies from taking responsibility for their actions abroad.108 Of course, the dismissal of an action based on forum non conveniens does not amount to a res iudicata; in practice, however, lawsuits are often not refiled in another jurisdiction, meaning that pleading forum non conveniens can effectively be used as a way to avoid liability altogether.109 If the lawsuits are successfully refiled and a judgment is handed down, US courts may still refuse recognition and enforcement against the defendant. This happened in Chevron, where inhabitants of Ecuador and Peru sued Chevron for damages because of environmental harm induced by Chevron’s oil operations in the two countries. The US courts first dismissed the suits, arguing that Ecuador was the appropriate forum despite claims that the judicial system in Ecuador was inapt and corrupt.110 Later on, however, after a court in Ecuador found Chevron liable to pay damages totalling $18 million, the US courts denied recognition and enforcement in the US (and prohibited enforcement worldwide) on the grounds that the judgment was a result of corruption.111 f) Consequences for climate change litigation against corporations concerning 39 damages or protective measures. According to these principles, lawsuits against USbased emitters of greenhouse gases can be instituted in those US states in which the companies are incorporated or have their principal place of business. However,

102 Filartiga v. Pena-Irala, 630 F.2d 876 (2d Cir.1980); Kadic v. Karadzic, 70 F.3d 232 (2d Cir. 1995); Doe I v. Unocal Corp., 395 F.3d 932 (9th Cir. 2002). 103 Kiobel v. Royal Dutch Petroleum Co., 133 S.Ct. 1659 (2013). 104 Van Loon, ULR (2018), 298 (306): The Supreme Court “drastically limited the potential use of this Act.” 105 138 S.Ct. 1386 (2018). 106 Cf on this doctrine generally Hay/Borchers/Symeonides/Whytock, Conflict of Laws, § 11.8. et seq. In the US, the leading case is still Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 67 S.Ct. 839, 91 L.Ed. 1055 (1947). This doctrine is also applied in other common law jurisdictions, including the UK, insofar as the Brussels Ibis Regulation is inapplicable due to the defendant being domiciled outside the EU; cf Cheshire/North/ Fawcett, Private International Law, pp. 393 et seq.; Dicey/Morris/Collins, The Conflict of Laws Vol. I, mn. 12–007 et seq. 107 Cf Whytock/Robertson, 111 Colum.L.Rev. (2011), 1444 (1453). 108 Van Loon, ULR (2018), 298 (309), citing as examples the litigation which arose from the Bhopal disaster, US Court of Appeals, 2nd Circuit. In re Union Carbide Corp. Gas Plant Disaster at Bhopal India in December 1984, 809 F.2s 195, and the Chevron case, infra fn. 109 et seq. 109 Erichson, Stanford Journal of Complex Litigation, 2013, 417 (420 fn. 22 with further references). 110 Aguinda v. Texaco, Inc., 303 Federal Reporter 3d 470 (US Court of Appeals, 2nd Circuit 2002). 111 Chevron Corp. v. Donziger, 886 F. Supp. 2d 235 (2012); van Loon, ULR (2018), 298 (309).

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admissibility can always be subject to an application for dismissal on grounds of forum non conveniens, especially if relief is sought by foreigners for foreign injuries.112 Plaintiffs who try to sue foreign companies like Royal Dutch Shell or British Petroleum in the US with a view to either joining claims against all major fossil fuel companies worldwide or taking advantage of specific mechanisms of US procedural law (e.g. jury trial, pre-trial discovery, class action, contingent fee, punitive damages, etc.) will likely be denied access to US courts,113 whether state or federal.114 The fact that the company does business in the US, has a US-based subsidiary or has caused damage in the US is not considered to be a sufficient connection to the US. Another question is whether it is possible to sue the foreign subsidiary of a US corporation at the corporate domicile or principal place of business of the parent company. In Goodyear v Brown,115 the Supreme Court rejected the idea of a “single enterprise theory” that would disregard the corporate veils for jurisdictional purposes.116 It held instead that the corporate ties of a foreign subsidiary to its US parent company alone are not sufficient to establish general jurisdiction over the foreign subsidiary in the US. Rather, the plaintiffs need to show that the foreign subsidiary’s contacts with the forum state are “so continuous and systematic [as] to render it essentially at home” in the forum state.117

IV. Choice of Law 1. Introduction 40

Given the possible divergences between the various jurisdictions on the rules and standards on tortious liability for climate change-related acts or omissions, which law the courts will apply to a given case is important. As for jurisdiction, the cross-border element triggering a conflict-of-laws issue will regularly result either from the fact that the tortfeasor and the victims are located in different states or from the corporate structure of the defendant.118 There are no internationally uniform rules on the law applicable to liability in tort. Without any regional unification (see infra, 2: Rome II Regulation), it is therefore up to each state to define its own rules and connecting factors. It is also important to note the differences in the application of conflict rules: while many civil law jurisdictions apply conflict rules ex officio and treat foreign substantive rules as “law” that the court must ascertain itself (e.g. by commissioning expert opinions), in most common law jurisdictions, it is up to the parties to plead the applicability of conflict rules and to prove the content of foreign law to be a fact. If the parties fail to do so, the substantive rules of the forum will be applied notwithstanding 112

Erichson, Stanford Journal of Complex Litigation, 2013, 417 (420); van Loon, ULR (2018), 298 (309). Cf City of Oakland and the People of the State of California v. BP, Chevron and others, order granting motions to dismiss for lack of personal jurisdiction, District Court for the Northern District of California 27 July 2018 (http://blogs2.law.columbia.edu/climate-change-litigation/wp-content/uploads/ sites/16/case-documents/2018/20180727_docket-317-cv-06011_order-1.pdf. Accessed 10.3.2020). Cf also van Loon, ULR (2018), 298 (308). 114 However, in Brystol-Myers Squibb Co. v. Superior Court of California, 582 U.S. (2017), a decision on the jurisdiction of the state courts of California, the Supreme Court emphasised in an obiter dictum (sub. IV) that it restricted its view to an interpretation of the due process clause of the 14th Amendment and reserved its opinion on due process in the federal courts (5th Amendment). 115 Fn. 81. 116 Fn. 81 at p. 13 et seq. 117 Fn. 81 at p. 13; cf also van Loon, ULR (2018), 298 (308). 118 Cf supra, I. 2. 113

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the cross-border nature of the case.119 Note, however, that despite their duty to apply conflict rules ex officio, courts sometimes tend to overlook the private international law dimension of cases. For example, in the case of the Peruvian farmer who claimed compensation from RWE because of the potential damage to his land in Peru as the result of the melting of a glacier, the LG Essen has applied German property law without giving any consideration to the fact that the affected immovable was situated in Latin America and that, because of the cross-border element, Art. 44 EGBGB and the rules of the Rome II Regulation should have been applied.120

2. EU: Liability in tort (delict) according to the Rome II Regulation a) Applicability. The 2007 EU Regulation on the Law Applicable to Non-Contractual 41 Obligations (Rome II) unifies the conflict rules among the Member States of the EU, except for Denmark. Like all other regulations in the area of conflict of laws, it is of “universal application” (Art. 3 Rome II), meaning that the courts of the Member States will apply its rules to every cross-border case, regardless of whether there is any possible connection of the facts with third states121 or whether the law of a third state might apply. Note, however, that the question whether conflict rules are to be applied ex officio or only upon request by the parties is not answered unanimously among the Member States (supra, 1.). Although one may argue that the status quo is incompatible with the spirit of the European unification of Private International Law (PIL), these differences persist in practice. According to Art. 31 Rome II, the Regulation shall only “apply to events giving rise to 42 damage which occur after its entry into force”, which was on 11 January 2009.122 The time at which proceedings are initiated is immaterial. In climate change litigation, the “event giving rise to damage”, meaning the event for which the tortfeasor is alleged to be responsible, will be the greenhouse gas emissions. For the most part, they will have occurred before the entry into force of the Rome II Regulation,123 meaning that the autonomous PIL of the Member States will apply with respect to that period of time. German courts, for example, would have to judge the applicable law according to Art. 40 EGBGB; however, the outcome would not be different from an application of Art. 7 Rome II (see below): both rules effectively enable the victim to choose between the law of the state where the damage is located and the law of the state where the event giving rise to the damage occurred. Article 2 (2) Rome II emphasises that the Regulation also applies to non-contractual 43 obligations that are “likely to arise”. Pursuant to Art. 2 (3) Rome II, it applies to “an event giving rise to damage” as well, and the notion of “damage” includes damage that is likely to occur. It is therefore undisputable that the Regulation also covers claims for injunctive relief or compensation for protective measures against future damage. b) Freedom of choice of law, Article 14 Rome II. Article 14 Rome II Regulation 44 grants parties the freedom to choose the applicable law either ex post (Art. 14 (1) (a)) or, if “all the parties are pursuing a commercial activity, also by an agreement freely 119 Cf in greater detail Kieninger, in: Leible (ed.), General Principles of European Private International Law, 2016, p. 357; Hartley, 45 ICLQ (1996), 271; Esplugues/Iglesias/Palao (eds.), Application of Foreign Law, 2011; Cheshire/North/Fawcett, Private International Law, p. 803. 120 Cf LG Essen, 15.12.2016, ZUR 2017, 370; neither does the court mention a choice of law pursuant to Art. 14 Rome II Reg. 121 Cheshire/North/Fawcett, Private International Law, pp. 801 et seq.; Halfmeier, in: Calliess (ed.), Rome Regulations, 2nd ed., 2015, Article 3 Rome II, mn. 11 et seq. 122 ECJ Case C-412/10 Deo Antoine Homawoo v GMF Assurances SA [2011] ECR I-11603, mn. 30. 123 For example, in the case pending before the OLG Hamm (supra fn. 5), it is claimed that RWE is responsible for greenhouse gas emissions that span 100 years.

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negotiated before the event giving rise to the damage occurred” (Art. 14 (1) (b). Unlike the rules on other special torts (see Art. 8 (3) and 6 (4)), Art. 7 on environmental damage (infra, c)) does not exclude freedom of choice of law, but for practical reasons, it seems only relevant where parties want to choose the law of the forum state after the proceedings have been instituted. 45

c) Special rule on environmental harm, Article 7 Rome II. Where liability for environmental harm is at stake, Art. 7 takes precedence over the general rule in Art. 4. Article 7 refers to Art. 4 (1) with modifications, but the rule on closer connection in Art. 4 (2) and the escape rule in Art. 4 (3) remain inapplicable.124

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aa) Applicability. Article 7 Rome II refers to “a non-contractual obligation arising out of environmental damage or damage sustained by persons or property as a result of such damage”. With a literal reading of the provision, one could argue that the rule only covers factual scenarios where the tortious act has a direct negative impact on the environment. If that were the case, Art. 7 would not cover typical climate change-related events, since the damage to persons or property through storms, floods, heatwaves, etc. is not the result of “environmental damage” in a strict sense because the accumulation of carbon dioxide and other greenhouse gases in the atmosphere and the consequential global warming is not per se damage to the atmosphere. Rather, it is the consequences of global warming that have a negative impact on the environment. However, according to the predominant opinion, Art. 7 Rome II nevertheless applies to climate change cases because it is held to be sufficient if the damage to persons or property is caused by an influence on or change in the environment.125 In other words, it suffices if there is some causal link between the change in the environment (to which the defendant has contributed) and the damage to persons or property.126 Article 7 includes torts such as nuisance, despite the fact that in some jurisdictions (e.g. under German law) a property law remedy might also exist (infra, 3).127

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bb) Place of damage rule. Article 7 principally refers to Art. 4 (1) Rome II Regulation and therefore leads to the application of the law at the place where the primary damage or injury that was directly or indirectly caused by the tortfeasor through an impact on the environment occurred. The location of further (mostly pecuniary) damage resulting from the injury of the victim’s health or property is irrelevant.128 For climate change cases, this means that the applicable law is that of the place where the damage to lives, health or property arising from the environmental impact of global warming has occurred or is likely to occur. Article 7 Rome II clearly only refers to Art. 4 (1), not to Art. 4 (2) or (3) Rome II Regulation. The application of Art. 7 and its lex loci damni rule is therefore strict and cannot be avoided, unless the victim chooses to use the law of the place where the damaging event occurred, see infra, cc). As a result, greenhouse gas-emitting corporations must potentially face liability under the law of all states where global warming is already damaging or threatening to damage lives, health and property. 124 Von Hein, in: Calliess (ed.), Rome Regulations, Article 7 Rome II, mn. 9; von Plehwe, in: Hüßtege/ Mansel (eds.), Nomos Kommentar-BGB, 3rd ed., 2019, Art. 7 Rom II, mn. 17. 125 Lehmann/Eichel, RabelsZ 2019, 77 (94); Junker, in: MünchKomm, 7th ed., 2018, Art. 7 Rom II-VO, mn. 12 with further references; G. Wagner, IPRax 2008, 1 (9); Wurmnest, in: Herberger/Martinek/ Rüßmann (eds.), jurisPK-BGB, 8th ed., 2017, Art. 7 Rom II-VO mn. 37; Huber, in: BeckOGK, 1.10.2019, Art. 7 Rom II-VO, mn. 33; Plender/Wilderspin, The European Private International Law of Obligations, 4th ed., 2014, mn. 21–020. 126 Lehmann/Eichel, RabelsZ 2019, 77 (95) with further references. 127 Plender/Wilderspin, The European Private International Law of Obligations, mn. 21–006 referring to ECJ Case C-343/04 Land Oberösterreich v ČEZ a.s. [2006] ECR I-4586. 128 Von Plehwe, in: Nomos Kommentar-BGB, Art. 7 Rom II, mn. 17.

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cc) Option. According to Art. 7 Rome II, the claimant has the right “to choose to 48 base his or her claim on the law of the country in which the event giving rise to the damage occurred”. This one-sided option is justified by the fact that the Regulation is intended to offer victims of cross-border damage to the environment a high and equal level of protection. If the place of damage rule were to be strictly followed, victims on different sides of a border between Member States could get different levels of compensation and protection, depending on the law at the place of the damage. Such inequality is to be avoided.129 With respect to greenhouse gas emissions, the relevant “event giving rise to the damage” is located where the emissions occur, not the place where the emitting corporation’s decisions are made.130 dd) Scope of the applicable law. Article 15 Rome II Regulation contains a non- 49 exclusive list of matters which are governed by the applicable law as defined by Art. 4 et seq. This includes in particular “(a) the basis and extent of liability, including the determination of persons who may be held liable”; “(c) the existence, the nature and the assessment of damage or the remedy claimed;” “(d) […] the measures which a court may take to prevent or terminate injury or damage or to ensure the provision of compensation;” and “(h) […] rules of prescription and limitation, including rules relating to the commencement, interruption and suspension of a period of prescription or limitation.” The CJEU has held that rules on prescription cannot be regarded as mandatory provisions within the meaning of Art. 16 Rome II Regulation.131 d) Article 17 Rome II Regulation. aa) Local data rule. Article 17 states that “in 50 assessing the conduct of the person claimed to be liable, account shall be taken, as a matter of fact and in so far as is appropriate, of the rules of safety and conduct which were in force at the place and time of the event giving rise to the liability.” The rule enables the court to take into account so-called “local data” when assessing the standard against which the acts of the tortfeasor are to be measured. The classic cases at which Art. 17 Rome II is directed are road accidents; see Rome II Regulation Recital 34. If the applicable law is determined by the common habitual residence pursuant to Art. 4 (2) Rome II, then it differs from the place where the harmful event occurred as well as from the location where the damage was sustained. In this instance, it goes without saying that the safety rules of the state where the tortfeasor acted (e.g. on maximum speed, etc.) must be taken into account when assessing liability. In contrast, it is questionable whether and to what extent Art. 17 should be applied to cross-border torts like environmental liability, where the harmful event and the damage are typically located in different states. According to the predominant view, Art. 17 may still be applied, but with caution and restrictions.132 Moreover, local data may be taken into consideration within the framework of the lex loci damni, but Art. 17 does not enable the court to replace the applicable law.133 Rather, courts have to weigh the pros and cons when deciding whether and to what extent local rules at the place of the damaging event should be considered.134 129

Cf Cheshire/North/Fawcett, Private International Law, p. 830. Lehmann/Eichel, RabelsZ 2019, 77 (96); Huber, in: BeckOGK, Art. 7 Rom II-VO, mn. 38. 131 ECJ Case C 149/18 Agostinho da Silva Martins/Dekra Claims Services Portugal SA [2019] ECLI:EU: C:2019:84. 132 Junker, in: MünchKomm, Art. 17 Rom II, mn. 9; von Hein, in: Calliess (ed.), Rome Regulations, Article 17 Rome II, mn. 8. 133 Cheshire/North/Fawcett, Private International Law, p. 831 and p. 871; Dicey/Morris/Collins, The Conflict of Laws Vol. II, mn. 35–071; Plender/Wilderspin, The European Private International Law of Obligations, mn. 18–121. 134 Bittmann, in: Weller (ed.), Europäisches Kollisionsrecht, 2016, p. 213, mn. 369. 130

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It has been suggested that Art. 17 Rome II Regulation should be used in climate change cases to the widest possible extent because the applicability of the lex loci damni was “unrelated” and “unforeseeable” for the emitters.135 The authors voice the concern that states (which may be non-EU Member States because of the universal application of the Rome II Regulation) may introduce new substantive rules, lowering the threshold with respect to the causal link between greenhouse gas emissions and the resulting natural events that cause damage to persons or property.136 They fear that such rules would be applicable against EU-based corporations on the basis of Art. 7 Rome II Regulation and therefore propose to counter this result through a far-reaching application of Art. 17. The authors suggest that the limits set for greenhouse gas emissions in the statutory rules in force at the location of the emitting facility or in the licences granted by domestic public authorities should be regarded as local data and should therefore restrict the application of tort law at the location of the damage.137 52 However, such a general application of the standards at the place where the emitter is located through Art. 17 would effectively displace any stricter liability rules of the lex loci damni, which is contrary to what the rule intends. It would lead to a race to laxity138 and therefore contravene the intention of the European legislator, who, in Recital 25 of the Rome II Regulation, stresses the need for a high level of protection against environmental damage (citing Art. 174 EC Treaty (now Art. 191 TFEU)) and the need to discriminate in favour of the person sustaining the damage.139 Moreover, it cannot be said that the location of the damage was unforeseeable. The greenhouse effect, its relation to carbon dioxide emissions and its potential to negatively impact the natural environment is well documented and has been known for decades.140 The fact that no one can predict exactly where and what kind of damage will occur through storms, floods, droughts and heatwaves is inherent in the kind of change to the atmosphere brought about by greenhouse gas emissions and can therefore not exempt the emitters from liability. 51

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bb) Article 17 and the possible impact of permits or authorisations in accordance with public law. Another practically important question relates to the possible impact of permits granted by state authorities pursuant to the law of the location of the emitter. Do such permits preclude or limit tortious liability according to the law of the state where the damage occurs or is likely to occur? Plender and Wilderspin state that “while the question 135 Cf Lehmann/Eichel, RabelsZ 2019, 77 (97 et seq.). The unforeseeable nature of the liability is stressed by Lehmann/Eichel, RabelsZ 2019, 77 (100). On the other hand, the authors emphasize at p. 101 that the emitters should be allowed to rely on authorisations issued by their home states because in those proceedings, the public authorities will have weighed the advantages of the activities of the emitters for the public welfare against the effects of global warming. The authors therefore admit themselves that the effects of global warming were known. Cf also p. 103 where the authors stress that – of course – the negative impact of the emissions on the climate were foreseeable, even when the permits were granted to the fossil energy companies. The fact that the legal analysis by Lehmann and Eichel is primarily resultsdriven is further evidenced by the text at p. 101: in their view, it is immaterial whether the protection of the emitters against liability in accordance with the lex loci damni is achieved through Art. 17, Art. 16 (mandatory provision) or the ordre public (Art. 26). 136 Lehmann/Eichel, RabelsZ 2019, 77 (96 et seq.). 137 Lehmann/Eichel, RabelsZ 2019, 77 (97), who, however, only cite Lehmann himself (Nomos Kommentar-BGB, Art. 17 Rom II, mn. 41) in support of this view. 138 Von Plehwe, in: Nomos Kommentar-BGB, Art. 7 Rom II, mn. 23. 139 Dicey/Morris/Collins, The Conflict of Laws Vol. II, 15th ed., 2012, mn. 35–069; von Plehwe, in: Nomos Kommentar-BGB, Art. 7 Rom II, mn. 23. 140 Cf Pöttker, Klimahaftungsrecht, p. 131 et seq. with numerous references. Knowledge of the risks of anthropogenic greenhouse gas emissions can be traced back to 1965, when President Lyndon B. Johnson’s Science Advisory Committee Panel on Environmental Pollution reported that by the year 2000, emissions “would modify the heat balance of the atmosphere to such an extent that marked changes in climate could occur.”

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does not admit of a straightforward answer, it is nevertheless clear, that this should not automatically be a good defence”.141 Older jurisprudence of German courts suggests that the effects of permits granted by public authorities remain limited to the territory of the issuing state in accordance with the principle of territoriality of public law.142 Courts in the Netherlands and Austria have taken a more liberal view and have accorded extraterritorial effect to such authorisations if (a) they were granted in accordance with existing public international law, (b) the standards for granting the authorisation in the issuing state equated to those of the state where the damage occurred, and (c) those who were affected by the permitted emissions in the state where the damage occurred were party to the proceedings and were able to voice their concerns.143 Although the Rome II Regulation has not explicitly embraced this approach, its adoption has been suggested pursuant to Art. 17 Rome II so that foreign authorisations may be recognised under Art. 17 where the three criteria are met.144 The opinion that seems to be predominant holds that only those administrative decisions which prohibit or prescribe a certain conduct can qualify as local data, but that Art. 17 Rome II Regulation should not be extended to permissive authorisations which emitters can but do not need to use. This is because the ratio of Art. 17 Rome II is restricted to the avoidance of a conflict of obligations.145 However, others would extend Art. 17 Rome II Regulation to permissive authorisations, although only within the limits of the applicable law. Therefore, it would not be possible to attribute to it a more far-reaching effect than it could have under the lex loci damni.146 According to von Plehwe, licences which do not originate from authorities of the forum state can only be taken into account as local data according to Art. 17 Rome II (i) if they are functionally equivalent and (ii) if the law of the state where the damage occurs grants those licences such extraterritorial effect. There can be no “recognition” of licences which were not granted by the forum state.147 The most far-reaching view in favour of emitters is again taken by Lehmann and 54 Eichel. In climate change litigation cases, the authors propose that authorisations pursuant to the law at the location of the emitter should be granted full cross-border effectiveness in all states where damage occurs, irrespective of whether the cross-border effects and possible damage were taken into account when granting the permission or whether the persons affected had the chance to be heard in the proceedings which led to the authorisation.148 The main argument is the unforeseeable nature of potentially global damage, which in their view distinguishes climate change liability cases from other environmental harm liability cases.149 Comment: The extreme opinion voiced by Lehmann and Eichel seems to be 55 motivated by the wish to protect fossil energy companies and other greenhouse gas producers from seemingly “unforeseeable” potential liability, although it is well docu141 Plender/Wilderspin, The European Private International Law of Obligations, mn. 21–028 with further references. 142 Cf BGH 10.3.1978, DVBl. 1979, 226, 227; cf also Unberath/Cziupka/Pabst, in: Rauscher, EuZPR – EuIPR Kommentar Vol. III, 4. ed. 2016, Art. 7 Rom II VO, mn. 46. 143 Rechtbank Rotterdam 16.12.1983, Ned Jur 1084, No. 341, para 8.7.; OGH 20.12.1988, JBl. 1989, 239; cf also von Hein, in: Calliess (ed.), Rome Regulations, Article 7 Rome II, mn. 34. 144 Unberath/Cziupka/Pabst, in: Rauscher, EuZPR – EuIPR Kommentar Vol. III, Art. 7 Rom II VO, mns. 46–48. 145 Mankowski, IPRax 2010, 389 (390 et seq.); Matthes, GPR 2011, 146 (150 et seq.); Siems, RIW, 2004, 662; v. Bar/Mankowski, Internationales Privatrecht II, § 2 mn. 423 et seq.; in the same sense Hohloch, in: Erman BGB, Art. 7 Rom II VO, mn. 17 (licenses are not a subject-matter of Art. 17). 146 Maultzsch, in: BeckOGK, Rom II-VO Art. 17, mn. 25 et seq. 147 Von Plehwe, in: Nomos Kommentar-BGB, Art. 7 Rom II, mn. 23. 148 Lehmann/Eichel, RabelsZ 2019, 77 (98 et seq.). 149 Lehmann/Eichel, RabelsZ 2019, 77 (100).

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mented that the effects of carbon dioxide emissions and the resulting possibilities and dangers of climate change have been known at least since the 1970s, even if the extent of the possible consequences were not yet known at that time.150 Leaving policy-driven interpretations aside and returning to the relevant statutory rules and the considerations given by the European legislator, it must be noted that Art. 17 Rome II Regulation only allows local rules at the state where the tortfeasor acted to be taken into account “where appropriate”.151 Moreover, Art. 17 is meant to apply to local legal prohibitions; it is not designed to grant extraterritorial application to local authorisations of damage.152 If one were to nevertheless subscribe to the idea that even permissive licences may be taken into account as local data,153 this must be done with caution and restriction.154 It must be considered whether and to what extent the global effects of greenhouse gas emissions (especially in the more vulnerable parts of the world) have been taken into account in the proceedings leading up to the authorisation. Furthermore, the effects of such authorisations on civil liability will always have to be assessed by the lex loci damni.155 In sum, Art. 17 cannot be used to reverse the decision made by the European legislator in favour of a high level of protection in cases of environmental harm.156 56

e) No analogous application of Article 5 (1) (ii) in cases of environmental liability. In order to protect emitters from accountability in accordance with the lex loci damni even further, Lehmann and Eichel propose to apply Art. 5 (1) (ii) Rome II Regulation by way of analogy.157 In their view, this rule shall come into play where (a) no public permit authorising the emissions has been granted, (b) the permission is void, (c) the permitted limits have been negligently exceeded or (d) a court finds that it would be inadequate to apply the law at the location of the emitter in accordance with Art. 17. In all these cases, the suggestion is to protect the emitters against liability through an analogous application of Art. 5 (1) (ii) if they could not reasonably foresee the exact damage that may have been caused or will be caused by global warming. The authors want to unrestrictedly apply the lex loci damni only where the alleged tortfeasor has obtained the permission fraudulently or has willingly and knowingly exceeded its limits.158 After having thus effectively denied the law at the location of the damage any say in the standard of care that should be exercised by emitters of greenhouse gases, the authors “comfort” the reader by stating that conscious environmental sinners can still be judged pursuant to the law at the place of the damage.159 In their summary, they stress that according to the analogous application of Art. 5 (1) (ii), the law at the location where the acts giving rise to the damage took place (i.e. the law at the emitters’ location) should govern liability for climate change “exclusively”.160

150

Pöttker, Klimahaftungsrecht, p. 131 with further references. Cf also Plender/Wilderspin, The European Private International Law of Obligations, mn. 21–028. 152 Von Plehwe, in: Nomos Kommentar-BGB, Art. 7 Rom II, mn. 23 at the end (with further references). 153 Maultzsch, in: BeckOGK, Rom II-VO Art. 17, mn. 25 et seq. 154 Maultzsch, in: BeckOGK, Rom II-VO Art. 17, mn. 27. 155 Von Plehwe, in: Nomos Kommentar-BGB, Art. 7 Rom II, mn. 24; Maultzsch, in: BeckOGK, Rom II-VO Art. 17, mn. 25 et seq. 156 Yet the exclusive decisiveness of the carbon dioxide limits set by the state where the emitter is located at the expense of the applicability of the lex loci damni under Art. 7 is exactly the result that Lehmann and Eichel propose; cf RabelsZ 2019, 77 (105). 157 Lehmann/Eichel, RabelsZ 2019, 77 (105–107). 158 Lehmann/Eichel, RabelsZ 2019, 77 (105–107). 159 Lehmann/Eichel, RabelsZ 2019, 77 (107). 160 Lehmann/Eichel, RabelsZ 2019, 77 (107). 151

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Comment: This suggestion does not find any support in the wording of the Regulation, 57 nor is it shared by other commentators.161 The general prerequisites for an analogy are (i) an unintended regulatory gap and (ii) comparable interests. There is no evidence that the European legislator unintentionally omitted a rule analogous to Art. 5 (1) (ii) in Art. 7 and the interests are not comparable. In contrast, Recital 20, directed at Art. 5 Rome II Regulation, highlights at the outset that “the conflict-of-law rule in matters of product liability should meet the objectives of fairly spreading the risks inherent in a modern high-technology society”. One element of such fair risk distribution is the rule on foreseeability in Art. 5 (1) (ii). On environmental liability, on the other hand, Recital 25 stresses that, “regarding environmental damage, Article 174 of the Treaty […] provides that there should be a high level of protection[,] […] fully justif[ying] the use of the principle of discriminating in favour of the person sustaining the damage”. Moreover, there is no parallelism regarding the interests involved. Technological innovation is, as a matter of principle, in the interest of public welfare. It seems therefore just and equitable to protect producers from unforeseeable liability risks and to allow them to control their risks through selected marketing. Greenhouse gas emitters, on the other hand, do not run a special risk created by technological innovation. Their liability risks are created by the unforeseeable nature of the concrete damage that is, however, inherent in the kind of impact the emissions have on the atmosphere. Furthermore, even if one favoured an analogy, Art. 5 (1) (b) merely states that the law at the producer’s location prevails if he or she could not have foreseen that the product was marketed in the state where the victim was resident, purchased the goods or suffered the injury. Translated to the issue of liability for cross-border emissions, this would mean that the emitter could not be held liable according to the standards of the lex loci damni if he or she could not have foreseen that the emission could reach the state where the damage occurred. However, it is clear that emitters of greenhouse gases must know that the emissions are transported into the atmosphere worldwide. Therefore, even if one would subscribe to the idea of an analogy (which is not done here), the result that Lehmann and Eichel want to achieve – i.e. that emitters could only be held liable according to the lex loci damni if they could reasonably foresee the specific damage in that jurisdiction162 – is not attainable via an application of Art. 5 (1) (ii). f) Internationally mandatory rules and ordre public. The choice-of-law rules of the 58 Rome II Regulation can theoretically be supplanted by the internationally mandatory rules of the forum state (Art. 16 Rome II Regulation) and its ordre public (Art. 26 Rome II Regulation). However, this author is not aware of any present internationally mandatory rule that cuts off or limits liability for cross-border harm through climate change. Presently, it is hard to predict whether any potential forum state (which, after what has been said on jurisdiction, will most likely be the corporate home of a large greenhouse gas emitter) will in the future pass internationally mandatory legislation to shield its corporations from climate change liability. Given the strong public opinion in favour of greenhouse gas reduction and international obligations to cut emissions, it seems hardly conceivable that such legislation will get passed, at least in Western democracies. Instead, as far as corporate social responsibility is concerned, the trend is towards internationally mandatory rules establishing (and not limiting) the liability of corporations for human rights violations and environmental harm.163 As for the 161

This is even admitted by the authors themselves, Lehmann/Eichel, RabelsZ 2019, 77 (106). Lehmann/Eichel, RabelsZ 2019, 77 (107). 163 Cf Mansel, ZGR 2018, 439 (444 et seq.); Weller/Pato, ULR 2018, 397 (412 et seq.); on French legislation: Nasse, ZEuP 2019, 773; for possible future regulations on a European level, cf the “Study on Due 162

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reservation of ordre public, even Lehmann and Eichel will not bring it into play (from the perspective of German law), even though they otherwise try to shield possible defendants from the applicability of foreign law that could take a stricter view on liability for climate change-related events with every conceivable argument.164

3. Autonomous PIL: Property law 59

In some jurisdictions, for example in Germany, damage to land or injuries resulting from activities carried out on immovable property may also give rise to remedies in property law (in Germany § 1004 BGB, § 906 (2) sent. 2 BGB). As a matter of principle, these remedies do not require negligence and are therefore particularly attractive for claimants. However, in order to avoid any divergence from EU conflict rules, the German PIL (Art. 44 EGBGB) submits these remedies to the rules contained in the Rome II Regulation so that there is no need to resort to the lex rei sitae.

4. US conflict of laws 60

As a matter of principle, US courts apply conflict-of-laws rules only if the parties plead foreign law; the latter is treated as fact, not as law.165 Choice of law rules are state law and are the same for both interstate and international conflicts. Despite the richness of case law in the US on the law applicable to tort generally166 and the great number of climate change cases filed in the US, it is hard to give an estimate as to which law US courts would apply, not least because choice of law questions do not seem to figure prominently in climate change cases.167 For tort, the traditional rule is the lex loci delicti or “last event” rule under which the applicable law is determined by the place where the injury was suffered.168 However, due to the so-called “conflicts revolution”, strict rules have partly given way to “approaches”.169 The 2nd Restatement reflects this development in § 145, according to which “(1) The rights and liabilities of the parties with respect to an issue in tort are determined by the local law of the state which, with respect to that issue, has the most significant relationship to the occurrence and the parties under the principles stated in § 6. (2) Contacts to be taken into account in applying the principles of § 6 to determine the law applicable to an issue include: (a) the place where the injury occurred, (b) the place where the conduct causing the injury occurred, (c) the domicile, residence, nationality, place of incorporation and place of business of the parties, and (d) the place where the relationship, if any, between the parties, is centred.” For personal injury, § 146 of the 2nd Restatement gives preference to the “local law of the state where the injury occurred […] unless with respect to the particular issue, some other state has a more significant relationship under the principles stated in § 6 […].” Diligence Requirements Through the Supply chain, Final Report”, prepared for the European Commission, available at https://www.business-humanrights.org/sites/default/files/documents/DS0120017ENN.en_.pdf. 164 Lehmann/Eichel, RabelsZ 2019, 77 (107 et seq.). 165 Cf Hay/Borchers/Symeonides/Whytock, Conflict of Laws, § 12.15. 166 Cf the summary by Hay/Borchers/Symeonides/Whytock, Conflict of Laws, § 17, pp. 711–997. 167 E.g. the complaint in the lawsuit currently brought by Rhode Island against about 60 fossil fuel companies, including some foreign-based ones such as British Petroleum and Royal Dutch Shell, is a 150page document that only briefly mentions jurisdiction, and does not mention choice of law. The most recent annual survey of choice-of-law cases in the American courts by Symeonides, “Choice of Law in the American Courts in 2019 – Thirty-Third Annual Survey”, American Journal of Comparative Law 2020, (in print), does not mention any instance of climate change-related litigation. 168 Hay/Borchers/Symeonides/Whytock, Conflict of Laws, § 17.2. 169 For an overview of which states still follow the traditional rule, which adhere to the 2nd Restatement and which have adopted a combined approach, cf Symeonides (fn. 167) Table sub III. A.

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Recent cases on environmental liability follow § 146 and apply the law of the state where 61 the injury occurred rather than the one where the harmful event took place.170 Section 147 of the 2nd Restatement suggests a parallel rule for injuries to tangibles: “In an action for an injury to land or other tangible thing, the local law of the state where the injury occurred determines the rights and liabilities of the parties with respect to the particular issue, unless some other state has a more significant relationship under the principles stated in § 6 […].” Moreover, climate change litigation will probably aim at punitive damages. Pursuant to the draft 3rd Restatement, they may be awarded according to a state’s law(s) if all three or any two of the following are located in the state in question: the place of conduct, the place of the defendant’s domicile and the place of injury.171 170 In re Derailment Cases, and Reid v. Doe Run Resources Crp., cited according to American Law Institute, Restatement of the Law Second, Conflict of Laws 2d, Appendix, Court Citations July 2004 through June 2015, p. 355 and 361 et seq. 171 Hay/Borchers/Symeonides/Whytock, Conflict of Laws, 6th ed. 2018, § 17.50.

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PART 3 STATE LIABILITY UNDER INTERNATIONAL AND EUROPEAN LAW G. Environmental liability in international law Bibliography: Beyerlin/Marauhn, International Environmental Law, Hart Publishing/Verlag C.H.Beck, 2011, p. 39‐41; Brunnée, Sic Utere Tuo ut Alienum non Laedas, in: MPEPIL, Oxford, 2012, vol. IX, p. 188‐ 192; Crawford, The International Law Commission’s Articles on State Responsibility: Introduction, Text and Commentaries, Cambridge University Press, 2002, at p. 91 et seq., 201‐204; Douhan, Liability for Environmental Damage, MPEPIL vol.VI, (2012), p. 830; Handl, Territorial Sovereignty and the Problem of Transnational Pollution, AJIL 69 (1975), p. 50‐76; Langenfeld/Minnerop, Environmental Liability Provisions in International Law, in: Wolfrum/Langenfeld/Minnerop (eds.), Environmental Liability in International Law: Towards a Coherent Conception, Erich Schmidt Verlag, 2005, p. 16, 26 et seq.; Larsson, The Law of Environmental Damage: Liability and Reparation, Kluwer, The Hague, 1999; Miller, Trail Smelter Arbitration, in: MPEPIL vol. IX (2012), p. 1010‐1013; Reid, Liability for Dangerous Activities: A Comparative Analysis, 48 ICLQ 731‐756 (1999); Shriver, Certain Phosphate Lands in Nauru case, MPEPIL, vol. 2 Oxford, 2012, p. 57‐61; Stoll, Transboundary Pollution, in: Morrison/Wolfrum (eds.), International, Regional and National Environmental Law, Kluwer, 2000, at p. 175 et seq.; Tanzi, Liability for Lawful Acts, MPEPIL, vol. VI, p. 837; Watts, International Law and the Antarctic Treaty System, Cambridge 1992, p. 209 et seq.; Wolfrum, The Convention on the Regulation of Antarctic Mineral Resource Activities, Berlin, 1991; Xue, Transboundary Damage in International Law, Cambridge University Press, 2003.

Contents I. Introduction ..................................................................................................... II. Notion – environmental liability – what does it mean and what is the purpose in the context of a liability regime? ..................................... III. Development of a regime on environmental liability: From liability for transboundary harm to genuine international environmental liability ............................................................................................................... 1. Introduction – first jurisprudence .......................................................... 2. Development of the treaty law on civil liability .................................. 3. International treaties on the protection of the environment of international common spaces: A paradigmatic shift? ........................ 4. Customary international law: Does there exist an international regime on environmental liability?......................................................... IV. Concluding observations: Necessary features in a regime on international environmental liability .......................................................... 1. Introduction................................................................................................. 2. Liability for lawful or only illegal activities .......................................... 3. Intensity of harm ........................................................................................ 4. Liability for not establishing precautionary measures or an adequate response system......................................................................... 5. The matter of causality.............................................................................. 6. Fault based or strict liability .................................................................... 7. Calculating the amount of compensation to be paid and limits ..... 8. The potential claimant ..............................................................................

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I. Introduction Recently a farmer from Peru claimed compensation from RWE for damage to his agricultural activities in Peru caused by climate change. Different from the judgment of the first instance court, the Court of Appeal of Hamm decided that the claim was admissible and started to enquire whether causality existed between the activities of RWE and the damages claimed.1 In a different case and before a different national court, German farmers, with the assistance of Greenpeace, claimed compensation from the German government arguing that Germany had failed in effectively fighting the reasons for climate change. The claim was dismissed for the lack of the right to sue (Klagebefugnis).2 These two cases selected at random, and although originating at the national level, illustrate some of the problems faced in the attempts to develop an international regime concerning environmental liability. 2 Considering international law rules concerning environmental liability account has to be taken of the fact that in many cases environmental harm has its origin in activities of private actors. Therefore, traditionally a distinction is being made between civil liability and State liability regimes. There seems to be a preference of States for civil liability regimes, which in principle, do not include States as debtors. However, this distinction has been blurred recently as will be demonstrated by reference to liability in respect of environmental damage in Antarctica and deep seabed mining.3 3 Although an international regime concerning the responsibility of States exists based, at least in part, or reflecting customary international law4 international law, so far, has not been able to design a general international regime on environmental liability. The International Law Commission made such an attempt. Its deliberations commenced already in 1978 on scope and nature of international law for injurious consequences arising out of acts not prohibited by international law. Such deliberations were conducted in parallel to those on International Responsibility of States for Internationally Wrongful Acts.5 The ILC deliberations concerning injurious consequences not prohibited by international law finally resulted in 2001 in a set of Draft Articles on Prevention of Transboundary Harm from Hazardous Activities submitted to the UN General Assembly and the ILC recommended that the UN General Assembly initiate the elaboration of a convention based on these Draft Articles.6 In 2006, the ILC adopted ‘Draft Principles on the Allocation of Loss in the Case of Transboundary Harm Arising out of Hazardous Activities (Draft Principles)’.7 These Draft Principles are discussed controversially. 1

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Saùl Lliuya gegen RWE AG (Az. 5 U15/17). Administrative Court of Berlin Judgment of 31 October 2019 (10 K 412/18). Similar cases are pending before several courts in different countries. Most of them claim lack of activities on the side of the governments concerned others claim environmental liability for damages already incurred. Apart from national law, most of them invoke European as well as public international law. They all are attempts to influence the governmental policy via the judiciary. 3 On that see below at III.3. 4 ILC Articles on State Responsibility for Internationally Wrongful Acts, A/Res. 56/83 of 12 December 2001. 5 See fn. 4. 6 Report of the International Law Commission on the Work of its Fifty-Third Session, GAOR 56th Session Supplement 10, 370 at para. 94. The General Assembly expressed its appreciation on the work without taking a position about a possible future codification. 7 Report of the International Law Commission on the Work of its Fifty-Eighth Session, GAOR 61st session, Supplement 10, 106. In 2007 the General Assembly commended both documents the Draft Articles and the Draft Principles to the attention of the governments (A/RES 62/68 of 6 December 2007). 2

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Instead, international law treaty law, developed a sectoral approach resulting in regimes 4 on responsibility and liability such as for Outer Space, Antarctica (not yet fully in force) and damages from deep seabed mining (not yet fully operational) as well as civil liability regimes concerning damages resulting from – generally speaking – hazardous activities having a transboundary effect. Although each of these regimes reflects the one or other feature necessary for a regime on international environmental liability, these instruments are tailored to particular situations and may not easily serve as models. However, they have influenced each other. Any environmental liability regime whether a civil liability or State liability regime is 5 being based upon the Roman law principle sic utere tuo ut alienum non laedas (so-called no harm rule).8 The modern trend in respect of international environmental legal regimes considers environmental liability as the last option. The focus of these regimes is rather on prevention of environmental damage than on environmental liability. This is being guided by the consideration that environmental damages in most cases cannot be undone completely and that prevention may prove more cost effective than any remedial action. Taking into account the various attempts to establish an international regime on 6 environmental liability, it is mandatory to consider the potential object and purpose of such a regime. International regimes on environmental liability serve two not mutually exclusive purposes. It may have for objective to cover the costs for response action to environmental harm as well as the costs for damage inflicted through the environment to property or health. It may further have the objective to constitute a disincentive that persons, private entities or States do not externalize the costs of their activities. As such, and this constitutes the second aspect, such an object and purpose would render the regime concerned a mechanism to enforce international environmental standards.

II. Notion – environmental liability – what does it mean and what is the purpose in the context of a liability regime? The meaning of the term ‘environmental liability’ is being discussed controversially. 7 Two trends may be distinguished, one focusing on how the damage is being inflicted and the other, coming to a more narrow definition, focusing on whether the damage affects the environment or components thereof. In defining environmental liability, it is necessary, first, to achieve clarity of what is 8 meant by the term ‘environment’. The ILC in its Draft Principles9 follows a broad approach, which, however, does not enjoy universal recognition. It includes in the term ‘environment’ ‘natural resources, both abiotic and biotic, such as air, water, soil, fauna and flora and the interaction between the same factors. It also includes characteristic aspects of the landscape’.10 It is problematic whether to include also objects of archaeological or historical value.11 There is, due to the uncertainty concerning the definition of the term ‘international 9 liability’, no common understanding on the term ‘environmental damage’ either. The ILC defines environmental damage as: ‘(iii) loss or damage by impairment of the environment; (iv) the costs of reasonable measures of reinstatement of the property, or 8 See on that Brunnée, Sic Utere Tuo ut Alienum non Laedas, in: Max Planck Encyclopedia of Public International Law, Oxford, 2012, vol. IX, 188‐192. 9 See fn. 7 above. 10 Article 2(b) reads: (b) “environment” includes natural resources, both abiotic and biotic, such as air, water, soil, fauna and flora and the interaction between the same factors, and the characteristic aspects of the landscape (fn. 7 above). 11 Article 2 (a) (iii) Draft Principles (fn. 7 above).

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environment, including natural resources; (v) the costs of reasonable response measures.’12 This definition is comprehensive considering the context in which it is being formulated. This definition covers primarily loss or damage by impairment of the private goods but indirectly – by referring to the costs, which may be recovered – it also refers to damage to the environment as such. 10 This definition is convincing. It is not within the logic of modern international law to differentiate between damage to the environment as such (pure environmental damage) and damage to persons, property and expectations resulting from a damage to the environment.13 Both types of damages often go hand in hand although there is a clear trend in international law to establish a regime concerning responsibility and liability in respect of the environment as such. This may have for result that damage to persons, property and legal expectations become elements for quantifying damage rather than elements in defining environmental damage and liability respectively.

III. Development of a regime on environmental liability: From liability for transboundary harm to genuine international environmental liability 1. Introduction – first jurisprudence 11

Liability for environmental harm or degradations was first developed by jurisprudence in the context of transboundary situations. In this respect, reference is to be made to the Trail Smelter case.14 The case constituted a dispute between the USA and Canada concerning damages to private property in the USA resulting from the transboundary emissions of sulphur dioxide from a lead and zinc smelting plant in Canada. The arbitral tribunal developed two fundamental principles, which influenced the development of international environmental law. It established the principle sic utere tuo ut alienum non laedas15 and held Canada responsible for the damages already inflicted and for possible further negative transboundary effects. The ICJ in its Advisory Opinion on the Legality of the Threat or Use of Nuclear Weapons confirmed the no-harm principle at the same time expanding it. The Court stated: “The existence of the general obligation of States to ensure that actions within their jurisdiction and control respect the environment of other States or of areas beyond national control is now part of the corpus of international law relating to the environment.”16

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A further case of relevance is the Certain Phosphate Lands in Nauru case.17 In this case Nauru argued that Australia, as an administering power, had violated its basic 12

Principle 2 of the Draft Principles with Commentaries 127–28, para. 11 (fn. 7 above). Principle 2 (a) (ii) (see fn. 7 above) reads: loss of, or damage to, property, including property which forms part of the cultural heritage. 14 3 RIAA 1903 et seq. (1949); see on this case Miller, Trail Smelter Arbitration, in: MPEPIL vol. IX (2012), 1010‐1013; Handl, Territorial Sovereignty and the Problem of Transnational Pollution, AJIL 69 (1975), 50‐76; in general Beyerlin/Marauhn, International Environmental Law, Hart Publishing/C.H.Beck, 2011, 39‐41. 15 See above at fn. 8. 16 ICJ Reports 1996, 226, 241 et seq., para. 29. This statement was repeated in substance in the judgement of the ICJ in the case concerning Gabcikovo-Nagymaros Project (Hungary v. Slovakia), ICJ Reports 1997, 7, 41 at para. 53 in which it was emphasized that the protection of the environment was in the interest not only of individual States but also for the whole mankind. 17 Nauru v. Australia (1992), ICJ Reports 4 et seq. 13

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responsibilities by allowing extensive mining and export of phosphates, which had made parts of Nauru uninhabitable for environmental reasons. The case was settled amicably and Australia made payments to compensate for environmental damage.18 Of relevance, also for the future development of an international liability regime for environmental damages, are the decisions of the UN Compensation Commission, established in 1991, as a subsidiary organ of the UN Security Council to deal with the damages inflicted by Iraq on Kuwait.19 The Governing Council of the Commission specified various categories of environmental damage such as abatement and prevention of environmental damage, measures already taken to clean and restore the environment, reasonable measures to assess the damage to the environment and depletion of natural resources.

2. Development of the treaty law on civil liability International treaties which regulate liability for transboundary harm or in the 13 context of shared resources set forth liability for damage arising from particular types of hazardous activities such as oil pollution, including pollution from ships; carriage and disposal of hazardous wastes and substances; nuclear pollution; damages caused by industrial incidents and damage caused by living modified organisms. Some of the treaties mentioned above should be briefly considered with the view to 14 exemplify the relevant rules on environmental liability in civil liability treaties. As far as oil pollution at sea is concerned the existing treaty regime was influenced 15 by various incidents which resulted in significant damages to the marine environment as well as to private property. The damages were not only caused by the oil spills but also by the response actions undertaken. The regime established consists of the 1969 Convention on Civil Liability for Oil Pollution Damage, the 1971 Fund Convention, the 1992 Convention on Civil Liability for Oil Pollution Damage20 and the 1992 Fund Convention21 (amending the 1969/1971 treaties, which are becoming obsolete). This regime was updated by the 2003 Protocol to the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage.22 The Civil Liability Convention (CLC) covers loss or damage caused outside the vessel by contamination resulting from the escape or discharge of oil. Compensation for the damage to the environment is limited to costs of reasonable measures for reinstatement, actually undertaken or to be undertaken. The 2003 Protocol establishes a further level of compensation. This regime provides for liability on two levels. The liability (strict liability) rests first with the owner of the vessel concerned and second, if the compensation from the owner of the vessel is insufficient, the 1992 Fund will supplement the compensation to be paid up to a maximum amount. The 1993 Protocol establishes a third tier of compensation by establishing a Supplementary Fund23 covering the costs, which surpass the amounts covered under the 1992 Convention on Civil Liability.

18 For a discussion of the case, see Shriver, Certain Phosphate Lands in Nauru case, MPEPIL, Oxford, 2012, 57‐61. 19 For details concerning the establishment of this Commission, see Beyerlin/Marauhn, (fn. 14), 365. 20 http://library.arcticportal.org/1617/1/Liability_Conv_1992.pdf; BGBl. (last visited 27 December 2019); BGBl. 1996 II, 671; 2002 II S. 943. 21 International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damages, 1992, https://treaties.un.org./doc/Publication/UNTS/Volume%201110/volume1110/ 17146 English.pdf. (last visited 27 December 2019). 22 http://transportrecht.org/cop.content/uploads/Prot03Fonds92e.pdf. 23 International Oil Pollution Compensation Supplementary Fund, https://woww.jusuio.no/english services/library/treaties/06/604/imo_iopc_supplementary_fund.xml.

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It was, before the 1992 Protocol entered into force, a matter of dispute whether the regime concerning liability for oil pollution would cover damage to the environment as such, apart from damages to private property or injury of individuals. The Messina Appeal Court in a judgment of 24 December 1993 on damages caused by the Greek tanker Patmos decided positively.24 The 1992 Protocol, though, confines the definition of compensable damage to the reimbursement of appropriate reinstatement costs. The decisive question accordingly is how to define ‘appropriate reinstatement costs’. The Claims Manual, October 2013, of the International Oil Pollution Compensation Fund, 1992, states that ‘contributions may be made to costs of post-spill studies provided that they relate to damage which falls within the definition of pollution damage’. However, it further states that ‘compensation is not paid in respect of claims for environmental damage based on an abstract quantification calculated in accordance with theoretical models.’ The Manual finally excludes compensations of a punitive nature. 17 The 2001 International Convention on Civil Liability for Bunker Oil Damages25 follows the model of the 1992 Liability Convention covering oil spills from bunkers of vessels, rather from tankers to which the 1992 Convention on Civil Liability applies. 18 In addition to the international regime, concerning oil pollution there exists the 1996 International Convention on Liability and Compensation for Damage in connection with the Carriage of Hazardous and Noxious Substances.26 It follows largely the model of the 1992 Civil Liability Convention.27 19 As far as damages from the production of nuclear energy are concerned, a regime concerning civil liability has been developed by a set of international agreements. These are the 1960 Convention on Third Party Liability in the Field of Nuclear Energy (Paris Convention), 1960 as amended 2004,28 the 1963 Convention Supplementary to the Paris Convention (Brussels Convention), as amended 2004 and the Vienna Convention on Civil Liability for Nuclear Damage, revised in 1977, together with the 1997 Convention on Supplementary Compensation for Nuclear Damage29 and the 1988 Joint Protocol Relating to the Application of the Vienna Convention and the Paris Convention.30 The Paris Convention is a regional instrument and it provides for civil liability and compensation for damage caused by accidents occurring while producing nuclear energy. The liability rests – in form of strict but limited liability – with the operator of the nuclear installation concerned. The operator is obliged to get insurance. Compensation under this regime covers personal injury and damage to property, the measures to reinstate a damaged environment, the loss of income resulting from an impaired environment and the costs of preventive measures. The Brussels Convention provides additional funds, where the Paris funds prove to be insufficient. 16

24 See summary of the judgment in RECIEL 1995, 341‐342; see also Langenfeld/Minnerop, Environmental Liability Provisions in International Law, in: Wolfrum/Langenfeld/Minnerop (eds.), Environmental Liability in International Law: Towards a Coherent Conception, Erich Schmidt Verlag, 2005, 16. 25 http://www.imo.org/en/About/Conventions/ListOfConventions/Pages/International-Convention-onCivil-Liability-for-Bunker-Oil-Pollution-Damage-%28BUNKER%29.aspx (last visited 27 December 2019). 26 And its amendments: http://www.imo.org/en/OurWork/Legal/HNS/Documents/HNS%20Consolidated%20text.pdf (last visited 27 December 2019). 27 See more in detail Beyerlin/Marauhn (fn. 14), 369‐371. 28 https://www.oecd-nea.org/law/nlparis_conv.html (last visited 27 December 2019). 29 Vienna Convention on Civil Liability for Nuclear Damage, 1963 (which follows the model of the Paris Convention but it is open for all States; https://www.iaea.org/topics/nuclear-liability-conventions/ vienna-convention-on-civil-liability-for-nuclear-damage; Supplementary Convention, https://www.oecdnea.org/law/multilateral-agreements/liability-compensation.html (last visited 27 December 2019). 30 https://www.iaea.org/topics/nuclear-liability-conventions/joint-protocol-relating-to-application-ofvienna-convention-and-paris-convention.

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Concerning the transboundary movement of hazardous waste reference may be made 20 to the 1999 Protocol to the Basel Convention.31 It provides for liability and for adequate and prompt compensation for damage. The damage as defined includes loss of life or personal injury, loss or damage to property, loss of income resulting from an economic interest in the use of an impaired environment, and the costs of measures taken to prevent, minimize or mitigate damage or to effect an environmental clean-up.32 It is evident that this regime provides for environmental liability strictly speaking. The 1993 Convention on Liability for Damage Resulting from Activities Dangerous 21 to the Environment adopted by the Council of Europe33 establishes a liability regime on a regional basis. An operator is liable for incidents identified by the Convention. The liability is unlimited. The Convention protects the environment as well as private property, which forms part of the cultural heritage and characteristic aspects of the landscape. As far as modified genetic living resources are concerned, article 27 of the Cartagena 22 Protocol on Biosafety to the Convention on Biological Diversity34 mandates its Meeting of Parties (the Conference of Parties to the Biodiversity Convention) to adopt a process with respect to the appropriate elaboration of international rules and procedures in the field of liability and redress of damage resulting from transboundary movements of living modified organisms. This resulted in the Nagoya-Kuala Lumpur Supplementary Protocol on Liability and Redress to the Cartagena Protocol that entered into force 2018.35 Although the Supplementary Protocol follows the matrix of other civil liability treaties, it marks some important developments concerning environmental liability. The Supplementary Protocol provides a definition of damage referring to the adverse effect on the conservation and sustainable use of biological diversity that is measurable or otherwise observable and significant.36 A detailed list of indicatory is provided for to determine the significance of the effects. This may serve as a model in future instruments. The operator is obliged to take reasonable response action and if such response action is not taken, the competent authority may take such actions.37 The competent authority has the mandate to direct the response action taken by the operator or by another entity. Finally, the Supplementary Protocol refers to the responsibility and liability of States under international law.38 The liability of States under this Protocol has been increased since the State concerned has a far-reaching responsibility in respect of response actions to be taken. 31 Protocol on Liability and Compensation for Damage resulting from Transboundary Movements of Hazardous Waste and their Disposal, www.basel.int/countries/StatusofRatifications/TheProtocol/tabid/ 1345/Default.aspx (last visited 27 December 2019). 32 The relevant parts of article 2 read: (c) “Damage” means: (i) Loss of life or personal injury; (ii) Loss of or damage to property other than property held by the person liable in accordance with the present Protocol; (iii) Loss of income directly deriving from an economic interest in any use of the environment, incurred as a result of impairment of the environment, taking into account savings and costs; (iv) The costs of measures of reinstatement of the impaired environment, limited to the costs of measures actually taken or to be undertaken; and (v) The costs of preventive measures, including any loss or damage caused by such measures, to the extent that the damage arises out of or results from hazardous properties of the wastes involved in the transboundary movement and disposal of hazardous wastes and other wastes subject to the Convention; (d) “Measures of reinstatement” means any reasonable measures aiming to assess, reinstate or restore damaged or destroyed components of the environment. Domestic law may indicate who will be entitled to take such measures. 33 https://rm.coe.int/168007c079 (last visited 27 December 2019). 34 http://bch.cbd.int/protocol (last visited 27 December 2019). 35 http://bch.cbd.int/protocol/NKL_text.shtml (last visited 27 December 2019). 36 Article 2 (3). 37 Article 2 in connection with article 5. 38 Article 11.

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The regimes concerning civil liability although differing in details all follow a similar approach. They all provide for liability of the operator concerned, which means they all implement the polluter pays principle in general. However, this liability is limited in several respects. The incidents that give rise to liability are narrowly defined, so are the damages covered. The compensation owed is limited and supplemented by a fund. The fund consists mostly of contributions from operators engaged in the same activity. This system also reflects the polluter pays principle and may be qualified as an act of solidarity of those operators (Gemeinschaft der potentiellen Schädiger). Although these regimes on civil liability for the conduct of hazardous are positive in themselves their positive influence concerning a protection of the environment is limited. However, the way these regimes are established has had a positive influence on the implementation of the standards, which govern the conduct of the hazardous activities.

3. International treaties on the protection of the environment of international common spaces: A paradigmatic shift? Common spaces are those areas beyond national territorial jurisdiction such as Outer Space, Antarctica, the high seas, and the deep seabed and ocean floor (Area). For all these areas particular environmental regimes have been established, which have been, some more, some less, supplemented with a regime on environmental liability. 25 These regimes differ significantly from the civil liability regimes described so far. They have as a basis that all States are interested in the protection of the environment in these spaces and its use. Therefore, it was politically easier to find common ground for an environmental regime. However, as will be demonstrated this did not necessarily include a regime on environmental liability. 26 A forerunner of the regimes on common spaces were treaty-based regimes on commonly shared resources such as on international rivers. The regime applicable to the Rhine39 may serve as an example. The Rhine is governed by the 1999 Convention on the Protection of the Rhine, which replaces earlier treaties concerning the Rhine but not the 1976 Convention on the Protection of the Rhine against pollution by Chlorides and its Additional Protocols.40 These are typical agreements containing State obligations concerning preventive measures to be taken. They do not contain a specific regime on environmental liability. In this respect, recourse is necessary to State responsibility and liability for internationally wrongful acts. The same is true for the Danube.41 Neither the Convention on the Law of Non-navigational uses of International Watercourses, 1997,42 which is meant to serve as a model for treaty based regimes on international rivers, nor the Draft Convention concerning International Aquifers, 200843 provide for an international liability regime. Both, however, oblige States Parties not to significantly harm other States.44 The wording of the said provisions indicate that these two instruments do not provide for the protection of the environment as such but cover a wider spectrum of potential damages. The latter may, however, encompass any damage to the environment as well as a damage inflicted via a damage to the environment. Since a violation of the 24

39 Also in the context of shared resources, a judgment is to be mentioned, namely the Lac Lanoux case, 12 RIAA, 281 et seq. (1963). 40 https://www.internationalwaterlaw.org/documents/regionaldocs/rhine_river.html. 41 Danube River Protection Convention; https://www.icpdr.org/main/icpdr/danube-river-protectionconvention (last visited 27 December 2019). 42 UN Convention on the Law of Non-Navigational Uses of International Watercourses, 36 ILM, 700 (1997). 43 A/Res/63/124, Annex, 11 December 2008. 44 Articles 7 and 27 and article 6 respectively.

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Convention on international watercourses would constitute an internationally wrongful act, the general rules on international responsibility and liability are applicable. The Convention on International Liability for Damage Caused by Space Objects, 27 197245 establishes a legal regime concerning liability for States, not necessarily environmental liability, caused by space objects on Earth, including its airspace, or in Outer Space. The responsibility rests with the launching State (State which launched the space object concerned or from whose territory or installation the launching took place) (article II). Sufficient is a launching attempt. The launching State is ‘absolutely liable to pay compensation caused by its space object on the surface of the Earth’. Damage in outer space, such as on other space objects, is fault based. The Convention even gives an indication concerning the calculation of the damage. The article XII concerned reads: The compensation which the launching State shall be liable to pay for damage under this Convention shall be determined in accordance with international law and the principles of justice and equity, in order to provide such reparation in respect of the damage as will restore the person, natural or juridical, State or international organization on whose behalf the claim is presented to the condition which would have existed if the damage had not occurred. There is no direct reference to environmental damage but the wording is broad 28 enough to cover damage to the environment as well as damage inflicted through environmental damage. The regime on Antarctica was influenced by the regime governing Outer Space. The 29 legal situation in respect of Antarctica is a complex one. Most of Antarctica is claimed by States (Chile, Argentina, United Kingdom, Norway, France, Australia and New Zealand) whereas such claims for territorial sovereignty are objected to by other States. In spite of that an international agreement had been concluded, the Antarctic Treaty,46 which demilitarized Antarctica and concentrated on guaranteeing the freedom of scientific research on this continent. Over the years, the institutionally established cooperation among the States concerned focused more and more on the environmental protection of Antarctica, which was considered to constitute an ecosystem. After attempts had failed to establish a regime governing mineral resource activities in Antarctica47 a protocol concerning the protection of Antarctica (Environmental Protocol) was successfully concluded,48 which provided for the elaboration of a regime on environmental liability resulting from emergencies and from the conduct of activities in Antarctica.49 The negotiation process resulted in the adoption of Annex VI to the Environmental Protocol,50 which, however, covers only environmental emergencies. This Annex provides, which precautionary measures have to be taken by an operator. It further provides that in case of an environmental emergency the operator has to take 45

Convention on International Liability for Damage Caused by Space Objects, 1972, 961 UNTS, 181. Antarctic Treaty, 1959, 402 UNTS, 71. 47 Draft Convention on the Regulation of Mineral Resource Activities, 1988, 27 ILM, 865 (1988); on the Draft, see Wolfrum, The Convention on the Regulation of Antarctic Mineral Resource Activities, Berlin, 1991, Watts, International Law and the Antarctic Treaty System, Cambridge 1992, 209 et seq. 48 30 ILM, 146 (1991). 49 See articles 15 and 16 of the Antarctic Protocol; Article 16 of the Environmental Protocol reads: Consistent with the objectives of this Protocol for the comprehensive protection of the Antarctic and covered by this Protocol. Those rules and procedures shall be included in one or more Annexes to be adopted in environment and dependent and associated ecosystems, the Parties undertake to elaborate rules and procedures relating to liability for damage arising from activities taking place in the Antarctic Treaty area accordance with Article 9 (2). 50 Annex VI to the Environmental Protocol to the Antarctic Treaty (fn. above at 48). 46

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effective and prompt response action. If no such response action has been taken another State or even a private operator may take a response action if the negative impact on the Antarctic environment is significant and imminent.51 The liability of the operator is a strict one; exemptions are restricted.52 The operator concerned is obliged to pay to the State or entity which undertook the response action the costs for such response action. If no response action was undertaken the operator is liable to pay the costs for a response action which should have been undertaken. These payments are to be made to a fund, which has for objective to finance costs for response actions, which are not otherwise covered.53 The liability is limited.54 30 It is clearly established in this provision that the costs for the response action undertaken – or even the costs for a response action not having been undertaken – are determinative for the amount to be paid as compensation for environmental damage. The limitations provided for reflect the need to have the activities concerned insured. 51

See article 5 of Annex VI (fn. 48) above. See article 8 of Annex VI (fn. 48): 1. An operator shall not be liable pursuant to Article 6 if it proves that the environmental emergency was caused by: (a) an act or omission necessary to protect human life or safety; (b) an event constituting in the circumstances of Antarctica a natural disaster of an exceptional character, which could not have been reasonably foreseen, either generally or in the particular case, provided all reasonable preventative measures have been taken that are designed to reduce the risk of environmental emergencies and their potential adverse impact; (c) an act of terrorism; or (d) an act of belligerency against the activities of the operator. 2. A Party, or its agents or operators specifically authorised by it to take such action on its behalf, shall not be liable for an environmental emergency resulting from response action taken by it pursuant to Article 5(2) to the extent that such response action was reasonable in all the circumstances. 53 The relevant part of article 6 of Annex VI reads: 1. An operator that fails to take prompt and effective response action to environmental emergencies arising from its activities shall be liable to pay the costs of response action taken by Parties pursuant to Article 5(2) to such Parties. 2. (a) When a State operator should have taken prompt and effective response action but did not, and no response action was taken by any Party, the State operator shall be liable to pay the costs of the response action which should have been undertaken, into the fund referred to in Article 12. (b) When a non-State operator should have taken prompt and effective response action but did not, and no response action was taken by any Party, the non-State operator shall be liable to pay an amount of money that reflects as much as possible the costs of the response action that should have been taken. Such money is to be paid directly to the fund referred to in Article 12, to the Party of that operator or to the Party that enforces the mechanism referred to in Article 7(3). A Party receiving such money shall make best efforts to make a contribution to the fund referred to in Article 12 which at least equals the money received from the operator. 3. … 54 See article 9 of Annex VI unless the environmental emergency was brought about intentionally. Article 9 reads in its relevant part: 1. The maximum amount for which each operator may be liable under Article 6(1) or Article 6(2), in respect of each environmental emergency, shall be as follows: (a) for an environmental emergency arising from an event involving a ship: (i) one million SDR for a ship with a tonnage not exceeding 2,000 tons; (ii) for a ship with a tonnage in excess thereof, the following amount in addition to that referred to in (i) above: – for each ton from 2,001 to 30,000 tons, 400 SDR; – for each ton from 30,001 to 70,000 tons, 300 SDR; and – for each ton in excess of 70,000 tons, 200 SDR; (b) for an environmental emergency arising from an event which does not involve a ship, three million SDR. 2. (a) Notwithstanding paragraph 1(a) above, this Annex shall not affect: (i) the liability or right to limit liability under any applicable international limitation of liability treaty; or (ii) the application of a reservation made under any such treaty to exclude the application of the limits therein for certain claims; provided that the applicable limits are at least as high as the following: for a ship with a tonnage not exceeding 2,000 tons, one million SDR; and for a ship with a tonnage in excess thereof, in addition, for a ship with a tonnage between 2,001 and 30,000 tons, 400 SDR for each ton; for a ship with a tonnage from 30,001 to 70,000 tons, 300 SDR for each ton; and for each ton in excess of 70,000 tons, 200 SDR for each ton. (b) Nothing in subparagraph (a) above shall affect either the limits of liability set out in paragraph 1(a) above that apply to a Party as a State operator, or the rights and obligations of Parties that are not parties to any such treaty as mentioned above, or the application of Article 7(1) and Article 7(2). 3. Liability shall not be limited if it is proved that the environmental emergency resulted from an act or omission of the operator, committed with the intent to cause such emergency, or recklessly and with knowledge that such emergency would probably result. 4… 52

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So far, the Antarctic Treaty Consultative Parties have not developed a regime, although required by article 16 of the Madrid Protocol, providing for an environmental liability regime on damages caused by activities in Antarctica. Such a regime was discussed controversially in the negotiations leading to the adoption of Annex VI to the Environmental Protocol. It was objected to by the United States and China, in particular. Annex VI in this respect constitutes a compromise since it only refers to environmental emergencies. In spite of its limited scope the established regime on environmental emergencies already contains elements, which influenced the further development of international law on environmental liability. A comparative scheme on environmental liability is to be found in the Protocol on Civil Liability and Compensation for Damage Caused by Transboundary Effects of Industrial Accidents of Transboundary Waters to the 1992 Convention on the Protection and Use of Transboundary Watercourses and Lakes and to the 1992 Convention on the Transboundary Effects of Industrial Accidents (Kiev Protocol) (not yet in force).55 According to article 4 of this Protocol the liability is a strict one, with exemptions. The liability is limited as provided for in Part one of Annex II to the Protocol. Article 12 of the Protocol refers to State liability according to international law. The Kiev Protocol does not provide for a comprehensive system on environmental liability since it only cover the effects of accidents. The ensuing liability is oriented to cover damage to private property and individual harm. However, the scope of the damage to be covered is wide enough to encompass environmental damage. The most advanced environmental liability regime has been developed in the context of the law of the sea. It consists of two different tracks. A general provision on environmental responsibility and liability is contained in article 235 of the UN Convention on the Law of the Sea (UNCLOS). Paragraph 1 of this provision reiterates the responsibility of States (not only of States Parties) concerning the protection and preservation of the marine environment. It has to be read in conjunction with article 192 UNCLOS. According to its paragraph 2 all States are under an obligation to “…ensure that recourse is available … for prompt and adequate compensation or other relief in respect of damage caused by pollution of the marine environment by natural or juridical persons under their jurisdiction.” This covers the aspect of civil liability and damages inflicted by an impairment of the environment but not pure environmental damages. Paragraph 3 finally deals with the inter-State aspect of damage to the marine environment. However, as it is typical for UNCLOS, this provision does not develop a regime for responsibility and liability but refers to the development of the relevant international law.56 An elaborate regime concerning environmental liability has been established by article 139 UNCLOS in connection with article 4 Annex III to UNCLOS57 as well as the 55

www.unece.org/fileadmin/DAM/env/civil-liability/documents/protocol_e.pdf. Article 235 (3) reads: With the objective of assuring prompt and adequate compensation in respect of all damage caused by pollution of the marine environment, States shall cooperate in the implementation of existing international law and the further development of international law relating to responsibility and liability for the assessment of and compensation for damage and the settlement of related disputes, as well as, where appropriate, development of criteria and procedures for payment of adequate compensation, such as compulsory insurance or compensation funds. 57 Responsibility to ensure compliance and liability for damage 1. States Parties shall have the responsibility to ensure that activities in the Area, whether carried out by States Parties, or state enterprises or natural or juridical persons which possess the nationality of States Parties or are effectively controlled by them or their nationals, shall be carried out in conformity with this Part. The same responsibility applies to international organizations for activities in the Area carried out by such organizations. 2. Without prejudice to the rules of international law and Annex III, article 22, damage caused by the failure of a State Party or international organization to carry out its responsibilities under 56

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Draft Regulation of the International Seabed Authority on Exploitation of Mineral Resources in the Area (not yet finalized).58 Liability arising from damages caused by operators engaged in mineral resource activities rests with the respective operators. These may be States, State owned entities or natural or juridical persons. As far as private operators are concerned this regime is to be qualified as a civil liability regime and it is applied as such to States or State owned operators. However, article 139 (2) UNCLOS establishes in connection with article 4 (4) Annex III to UNCLOS a State liability for actions (or omissions) by private operators which have been sponsored by that State.59 36 It is necessary to establish the background of this provision and what it does constitute or rather not constitute. When the deep seabed-mining regime was established it was controversial whether private entities as well as natural persons could engage in deep seabed mining. This was finally accepted. When it came to the question of responsibility and liability, States, which did not accept the market system, that responsibility and liability of private actors under international law was not sufficient but that States should accept some responsibility in respect of private entities. It was equally emphasized, that any State responsibility should not deviate from the general principle under international law that a State is not responsible for private acts (or omissions) unless these are attributable to him. This resulted in establishing a parallel responsibility of States for private entities it has sponsored (Sponsoring State).60 This regime will be confirmed by the Regulation of the International Seabed Authority.61

4. Customary international law: Does there exist an international regime on environmental liability? Considering the fragmented references in treaty law and in particular the lack of common understanding as to whether damage to the environment as such is to be covered by a regime on environmental liability it seems to be premature to argue that such regime constitutes an emerging customary law.62 38 However, some basic elements of such a regime are firmly established in customary international law. It is uncontested that every State has the sovereignty to use its territory in accordance with its economic and environmental principles. It is equally uncontested that no State has the right to infringe the environment of other States significantly, in particular the one of neighbouring States (no harm principle). The basis for this rests in the principle that potential conflicts of sovereign rights have to be mutually accommodated. The principle formulated on that basis is that no State is obliged to tolerate 37

this Part shall entail liability; States Parties or international organizations acting together shall bear joint and several liability. A State Party shall not however be liable for damage caused by any failure to comply with this Part by a person whom it has sponsored under article 153, paragraph 2(b), if the State Party has taken all necessary and appropriate measures to secure effective compliance under article 153, paragraph 4, and Annex III, article 4, paragraph 4. 3. States Parties that are members of international organizations shall take appropriate measures to ensure the implementation of this article with respect to such organizations. 58 ISBA/25/WP.1. 59 Article 4 (4) reads: The sponsoring State or States shall, pursuant to article 139, have the responsibility to ensure, within their legal systems, that a contractor so sponsored shall carry out activities in the Area in conformity with the terms of its contract and its obligations under this Convention. A sponsoring State shall not, however, be liable for damage caused by any failure of a contractor sponsored by it to comply with its obligations if that State Party has adopted laws and regulations and taken administrative measures, which are, within the framework of its legal system, reasonably appropriate for securing compliance by persons under its jurisdiction. 60 Advisory Opinion of the International Seabed Chamber of ITLOS. 61 Fn. 58 above. 62 Different Douhan, Liability for Environmental Damage, MPEPIL vol.VI, (2012), 830, at 835.

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infringements of its environment that the emitting State would not accept itself.63 Several international courts and tribunals such as in the Trail Smelter Arbitration have ascertained this principle.64 Principles 21 and 22 of the Stockholm Declaration on the Human Environment, 1972 and the Principles 2 and 13 of the Rio Declaration on Environment and Development, 1992, expressly proclaim the responsibility of all States ‘to ensure that activities within their jurisdiction or control do not cause damage to the environment of other States or of areas beyond the limits of national jurisdiction’. They call upon States to develop further the international and national law regarding liability and compensation for the victims of pollution and other environmental damage beyond their jurisdiction, caused by activities within the jurisdiction or control of such States. In particular, these two declarations indicate clearly that a regime on environmental liability is still to be developed although some elements thereof are already confirmed. This assessment is confirmed by the activities undertaken by the ILC. The UN 39 General Assembly commended upon the work done by the ILC without prejudice to any further action. In particular the approach chosen by the ILC to refrain themselves to formulate principles rather than articles and to limit itself to transboundary effects is a clear indication that an overarching international regime concerning environmental liability has not been established yet in international customary law.

IV. Concluding observations: Necessary features of a regime on international environmental liability 1. Introduction The features addressed below are contained in several of the international treaties – 40 including drafts – and they are considered essential for a truly comprehensive international regime concerning environmental liability. Only few of the international treaties dealt with address all of them.

2. Liability for lawful or only illegal activities Civil liability treaties and the ILC drafts regulate liability for transboundary damage 41 caused in the course of a lawful activity, involving the risk of causing significant harm.65 This differs from the general international regime concerning responsibility of States for internationally wrongful acts.66 In that respect, a difference between civil liability regimes and State liability regimes seems to exist. This is not the case. All civil liability regimes either cover transboundary situations, which means there is a negative impact on the environment of a neighbouring State. The fact of a significant transboundary effect already constitutes an infringement in the sovereignty of the neighbouring State. Although the activity was legal the negative impact upon the environment of a neighbouring country is illegal. That means that civil liability responsibility reflects illegality of effect whereas State liability reflects illegality of action. 63 Stoll, Transboundary Pollution, in: Morrison/Wolfrum (eds.), International, Regional and National Environmental Law, Kluwer, 2000, at 175 et seq. 64 See fn. above as well as the literature. 65 Principle 2 (c) Draft Principles (fn. 7); Article. 1 Draft Articles (fn. 6); see Tanzi, Liability for Lawful Acts, MPEPIL, vol. VI, 837; Reid, Liability for Dangerous Activities: A Comparative Analysis, 48 ICLQ 731‐756 (1999); Larsson, The Law of Environmental Damage: Liability and Reparation, Kluwer, The Hague, 1999; Xue, Transboundary Damage in International Law, Cambridge University Press, 2003; Langenfeld/Minnerop (fn. 24), 26 et seq. 66 See fn. 4 above.

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As far as illegal activities in respect of civil liability cases are concerned it is reasonable to apply the principle a majore ad minus; if already legal activities may result in liability this would be even more the consequence as far as illegal activities are concerned. However, in practice additional issues will have to be dealt with in this respect. If an illegal activity causes transboundary harm, the question will be whether the State from whom the emission occurred had violated its obligation to ensure that its territory is not being used to the detriment of a neighbouring State. The Kiev Protocol67 may be interpreted to point into the direction that an obligation exists for a State to ensure that activities on its territory do not cause significant harm to a neighbouring country. Such responsibility can only be one of conduct. The State concerned will owe due diligence in this respect. 43 The first threshold for civil liability in respect of transboundary harm is that the activity concerned was hazardous when it was carried out. Additionally, the respective operator was aware or ought to have been aware of the risk. Whether an activity is hazardous depends on several environmental and other factors; some of them may be apparent, such as the environmental situation in the area where the activity is planned to take place, others may become apparent only in the course of the activity concerned. For example, establishing a chemical plant in an area where frequent earthquakes occur is more risky than establishing it in a different region. Because of that and because of the rapid development of science and technology, the ILC attached no list of potentially hazardous activities to its Drafts. States, however, may freely agree on the list of activities viewed by them as hazardous for the purposes of a specific treaty or they may agree on a list on hazardous substances.68 It is to be noted that such or similar definitions limit the applicability of the respective liability regime whereas the reference to hazardous activities, without specification, provides for considerable discretion in the application of the said regime. 42

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See fn. 55. See for example article 1 (a) and (b) Convention on the Transboundary Effects of Industrial Accidents (fn. 55) defining accidents and activities. See also the elaborate definition of hazardous substances in the International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea (HNS Convention, consolidated text, www.imo.org/en/OurWork/Legal/HNS/Documents//HNS%20Consolidated%20text.pdf (last visited 31 December 2019)); article 5 of this Convention reads: any substances, materials and articles carried on board a ship as cargo, referred to in (i) to (vii) below: (i) oils, carried in bulk, as defined in regulation 1 of Annex I to the International Convention for the Prevention of Pollution from Ships, 1973, as modified by the Protocol of 1978 relating thereto, as amended; (ii) noxious liquid substances, carried in bulk, as defined in regulation 1.10 of Annex II to the International Convention for the Prevention of Pollution from Ships, 1973, as modified by the Protocol of 1978 relating thereto, as amended, and those substances and mixtures provisionally categorized as falling in pollution category X, Y or Z in accordance with regulation 6.3 of the said Annex II; dangerous liquid substances carried in bulk listed in chapter 17 of the International Code for the Construction and Equipment of Ships Carrying Dangerous Chemicals in Bulk, as amended, and the dangerous products for which the preliminary suitable conditions for the carriage have been prescribed by the Administration and port administrations involved in accordance with paragraph 1.1.6 of the Code; (iv) dangerous, hazardous and harmful substances, materials and articles in packaged form covered by the International Maritime Dangerous Goods Code, as amended; (v) liquefied gases as listed in chapter 19 of the International Code for the Construction and Equipment of Ships Carrying Liquefied Gases in Bulk, as amended, and the products for which preliminary suitable conditions for the carriage have been prescribed by the Administration and port administrations involved in accordance with paragraph 1.1.6 of the Code; (vi) liquid substances carried in bulk with a flashpoint not exceeding 60°C (measured by a closed-cup test); solid bulk materials possessing chemical hazards covered by the International Maritime Solid Bulk Cargoes Code, as amended, to the extent that these substances are also subject to the provisions of the International Maritime Dangerous Goods Code in effect in 1996, when carried in packaged form; and (b) residues from the previous carriage in bulk of substances referred to in (a)(i) to (iii) and (v) to (vii) above. 68

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It is to be noted that a damage does not automatically indicate that the activity in 44 question was hazardous. Environmental impact inquiries are the established mechanism for an adequate risk assessment. An operator not having undertaken such risk assessment cannot claim to have been ignorant of the risk.

3. Intensity of harm As indicated above environmental damage must acquire a certain threshold to trigger 45 the applicability of an environmental liability regime. Various terms are being used in the relevant international treaties such as ‘serious’, ‘severe’, ‘significant’, ‘substantial’, ‘widespread’, ‘long-lasting’, ‘long term’. Influences below this threshold have to be tolerated. Article 2 of the ILC Draft Articles refers to significant harm.69 This results from the fact that States are interdependent and have to accept some trans-boundary effects. The Commentaries of the ILC on this particular provision are enlightening. They reflect the dominant approach in international law as to what should be covered by a regime on transboundary harm and the means how to establish the relevant risk and harm.70 To invoke the liability the damage has to be established by clear and convincing 46 evidence measured by factual and objective criteria and must have a real detrimental effect on human health, life, industry, property, environment, forestry, or agriculture of/ in another State. Harm which may be caused by State policies in monetary, political, or social spheres, is not eligible for compensation.71

4. Liability for not establishing precautionary measures or an adequate response system One of the controversial questions concerning civil liability for environmental 47 damage is whether and when States face international responsibility and eventually 69 Fn. 6 above: Article 2 reads: “Risk of causing significant transboundary harm” includes risks taking the form of a high probability of causing significant transboundary harm and a low probability of causing disastrous transboundary harm (Draft Articles with Commentaries at 152). 70 Subparagraph (a) defines the concept of “risk of causing significant transboundary harm” as encompassing a low probability of causing disastrous transboundary harm or a high probability of causing significant transboundary harm. The Commission feels that instead of defining separately the concept of “risk” and then “harm”, it is more appropriate to define the expression of “risk of causing significant transboundary harm” because of the interrelationship between “risk” and “harm” and the relationship between them and the adjective “significant”. (2) For the purposes of these articles, “risk of causing significant transboundary harm” refers to the combined effect of the probability of occurrence of an accident and the magnitude of its injurious impact. It is, therefore, the combined effect of “risk” and “harm” which sets the threshold. In this respect inspiration is drawn from the Code of Conduct on Accidental Pollution of Transboundary Inland Waters, 871 adopted by ECE in 1990. Under section I, subparagraph (f), of the Code of Conduct, “‘risk’ means the combined effect of the probability of occurrence of an undesirable event and its magnitude”. A definition based on the combined effect of “risk” and “harm” is more appropriate for these articles, and the combined effect should reach a level that is deemed significant. The obligations of prevention imposed on States are thus not only reasonable but also sufficiently limited so as not to impose such obligations in respect of virtually any activity. The purpose is to strike a balance between the interests of the States concerned. … (4)The term “significant” is not without ambiguity and a determination has to be made in each specific case. It involves more factual considerations than legal determination. It is to be understood that “significant” is something more than “detectable” but need not be at the level of “serious” or “substantial”. The harm must lead to a real detrimental effect on matters such as, for example, human health, industry, property, environment or agriculture in other States. Such detrimental effects must be susceptible of being measured by factual and objective standards. (5) The ecological unity of the planet does not correspond to political boundaries. In carrying out lawful activities within their own territories, States have impacts on each other. These mutual impacts, so long as they have not reached the level of “significant”, are considered tolerable. 71 Draft Articles with Commentaries 151 para. 16; Draft Principles with Commentaries 134 para. 24.

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liability for acts undertaken by natural or legal persons. As a matter of principle, States do not face international responsibility and liability for actions of private actors. Such acts are, in general, not attributable to States. Chapter II of the Articles of Responsibility of States for Internationally Wrongful Acts72 deals with this issue intensively and sets out several instances where a State may be responsible for acts of private actors. This is, however, not of relevance in this context. What is of relevance is that a State may have an obligation to monitor and control activities undertaken on its territory or under its jurisdiction. Such an international obligation must, however, be provided for in the primary rules of international law. Regimes, which establish such a connection between private actions, not attributable to a State, and an obligation of States, have been established for Antarctica and deep seabed mining under UNCLOS.

5. The matter of causality 48

It is well established for civil liability regimes as well as State liability regimes that the causality between the critical act or omission and the damage for which compensation is being sought is being established. This is clearly being expressed in article 31 (1) ILC Articles on State responsibility.73

6. Fault based or strict liability Liability treaties regulate liability of an operator of hazardous activities and set forth that his/her liability for any damage caused in the course of activity not prohibited by international law is strict/absolute/non-fault. The ILC clearly stated in the Draft Principles that liability of an operator ‘should not require the proof of fault’ (Principle 4 (2)). 50 An operator may only be exempted from liability when damage has been caused in an extraordinary situation out of his control: natural disasters; acts of war; and more recently acts of terror.74 These exemptions may only be applied when an operator proves that he took all necessary measures to prevent or minimize any transboundary impact. 51 Different scenarios result in differentiated liability regimes. It is clearly established that an operator is held strictly liable as a result of its exercise of hazardous activities. No explicit regime exists for non-hazardous activities. When damage arises from nonhazardous activities, e.g. research programs, tourism, etc., an operator could be liable on the basis of national law if it failed to take all appropriate means to prevent or minimize transboundary damage. The damage incurred induces the liability. If, however, an operator failed to take these measures in the course of a hazardous activity, the civil liability regimes provide that limitations of liability will not be applicable.75 52 As noted above, liability conventions and the drafts developed by the ILC provide for the responsibility of States ‘to ensure that activities within their jurisdiction or control do not cause damage to the environment of other States and areas beyond their jurisdiction’. A State on the territory of which, or under the control of which, hazardous activities take place, may be liable for its failure to fulfil its international obligations. That would be the case if the State in question has not taken all necessary and appropriate measures to prevent significant harm or, at any event, to minimize the risk thereof through establish49

72 Fn. 4 above; see also Crawford, The International Law Commission’s Articles on State Responsibility: Introduction, Text and Commentaries, Cambridge University Press, 2002, at 91 et seq. 73 See fn. 4 above and Crawford (fn. 72), at 201‐204. Mostly the terms ‘causality’ or ‘causal link’ are being qualified. Qualifications are amongst others ‘directness’, ‘proximity’ or ‘foreseeability’ 74 Douhan (fn. 62), at p. 835. See in particular article 8 Annex VI to the Environmental Protocol to the Antarctic Treaty (fn. 49) and article 4 of the Kiev Protocol (fn. 55). 75 Douhan (fn. 62), at 834.

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ing necessary monitoring mechanisms, prior authorization of hazardous activity, cooperation with other States, assessment of risks, notification, information. Dogmatically the State concerned is, in such cases, liable for its own failure not for the failure of a private operator. As a logical consequence thereof, a State is not liable for damage, if it has taken all necessary and appropriate measures to secure effective compliance with the corresponding treaty.76 As stated in the Advisory Opinion of the Seabed Disputes Chamber of ITLOS the obligation ‘to take all necessary and appropriate measures’ is an obligation ‘to deploy adequate means, to exercise best possible efforts, to do the utmost’ to obtain the result. It is an obligation ‘of conduct’ but not ‘of result’. If damage is caused, the operator concerned carries primary liability. The extent of 53 State liability should be proportionate to the gravity of its failure to ensure that activities of private persons under its jurisdiction or control are carried out in conformity with the rules of a corresponding international treaty and the existence of a causal link between this failure and the damage caused.

7. Calculating the amount of compensation to be paid and limits The general trend is clearly that environmental damage is quantified by the costs of 54 response action whether undertaken or to be undertaken. It is equally evident that international law does not foresee punitive damages. To allow for the possibility of insurance, liability is limited to a fixed amount. This makes it necessary to provide for additional sources to cover the costs not covered by the operator concerned. The common approach in this respect is the establishment of a fund, mostly funded by the operators, which are engaged in the activity concerned (such as the transport of hydrocarbons). In some cases, supplementary funds are being established. Annex VI of the Environmental Protocol to the Antarctic Treaty follows that model so do the Draft Regulations on the Exploitation of Mineral Resources of the Seabed.

8. The potential claimant Liability treaties often do not regulate explicitly who can apply for compensation for 55 environmental damage. Nevertheless, because of the very nature of the harm only the natural or legal persons whose rights have been violated may usually make claims. Violations of States’ rights may only be raised by the State concerned. An exception exists, though. Under article 48 of the ILC Articles on State Responsibility,77 claims may be brought, under particular conditions, by other interested States. This constitutes a step towards an actio popularis. The third States may not invoke, though, liability. The development of an international regime on environmental liability is still in the 56 process of development; various international treaties concerning civil liability or State liability have developed several features, so far. Only the liability system established by article 139 UNCLOS in connection with article 4 (4) Annex III to UNCLOS, although not yet completed, may be considered as a comprehensive regime. It is clearly formulated as a means to enforce the rules and standards established by the International Seabed Authority. However, it is evident that environmental liability is nothing but the ultimate mechanism to avoid damages to the environment or damages induced via environmental damages. The focus of this regime is rather on avoidance of risks and environmental damage. 76 See article 139 UNCLOS in connection with article 4(4) Annex III to UNCLOS as well as Annex VI to the Environmental Protocol to the Antarctic Treaty. 77 See fn. 4.

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H. The international law and policy implications of climate change litigation: sustainable developments in international investment law and policy related to renewable energy, climate change mitigation and adaptation* Bibliography: Adler, U.S. Climate Change Litigation in the Age of Trump: Year One, Sabin Center for Climate Change Law, 2018, http://columbiaclimatelaw.com/files/2018/02/Adler-2018-02-U.S.-ClimateChange-Litigation-in-the-Age-of-Trump-Year-One.pdf.; Allen and Others, Climate Change and Capital Markets, The Steyer-Taylor Center for Energy Policy and Finance, 2015, https://law.stanford.edu/wpcontent/uploads/2015/07/Climate-Change-and-Capital-Markets-FINAL-05-13-2015.pdf.; Ansar/Caldecott/ Tilbury, Stranded assets and the fossil fuel divestment campaign: what does divestment mean for the valuation of fossil fuel assets?, October 2013, https://ora.ox.ac.uk/objects/uuid:f04181bc-8c4f-4cc1-8f01cafce57975ae/download_file?file_format=pdf&safe_filename=2013.10.08_SA_in_FF_Div_Campaign.pdf&type_of_work=Report; Ashukem, Setting the Scene for Climate Change Litigation in South Africa, Law, Environment and Development Journal 35, 2017; Banda/Fulton, Litigating Climate Change in National Courts: Recent Trends and Developments in Global Climate Law, Environmental Law Reporter – News & Analysis, 2017; Barker, Climate change and the fiduciary duties of pension fund trustees – lessons from the Australian law, Journal of Sustainable Finance and Investment, 2016; Barker/Winter, Temperatures rise in the boardroom: climate litigation in the commercial arena, Australian Environment Review, 2017; Centre for Climate and Energy Solutions, Outcomes of the U.N. Climate Change Conference in Bonn, November 2017, https://www.c2es.org/site/assets/uploads/2017/11/outcomes-of-the-u-n-climate-change-conference-in-bonn. pdf; CERES, Governments Urged to Maintain Momentum on Climate Action, Briefing Paper submitted to G7 and G20, July 2017, https://www.ceres.org/sites/default/files/Briefing-Paper-for-G20.pdf; Client Earth, World-first climate risk case launched over major coal plant in Poland, 2018, https://www.clientearth.org/ world-first-climate-risk-case-launched-over-major-coal-plant-in-poland; Climate Law and Governance Initiative, CLGD 2019 Proceedings Report, 2019, http://www.climatelawgovernance.org/wp-content/uploads/ 2020/02/CLGD-2019-Proceedings-Report.pdf; Cook, Interview with Miles/Welsh, Arbitration and climate change, The Law of Nations (Podcast), November 2017; Cordonier Segger, Advancing the Paris Agreement on Climate Change for Sustainable Development, Cambridge International Law Journal 5(2), p. 202 et seq; Cordonier Segger, Athena’s Treaties: Crafting Trade and Investment Agreements for Sustainable Development, Oxford University Press, 2020; Cordonier Segger, Climate Change and Sustainable Energy Measures in Regional Trade Agreements (RTAs): An Overview, International Centre for Trade and Sustainable Development, Issue Paper No 3, 2013, https://www.ictsd.org/sites/default/files/downloads/2013/08/climatechange-and-sustainable-energy-measures-in-regional-trade-agreements-rtas.pdf; Cordonier Segger, Inspiration for Integration: Interpreting International Trade and Investment Accords for Sustainable Development, Canadian Journal of Comparative and Contemporary Law 3(1), p. 159 et seq.; Cordonier Segger/Gehring/ Newcombe (eds.), Sustainable Development in World Investment Law, Kluwer Law International, 2012; Cordonier Segger/Weeramantry, Sustainable Development Principles in the Decisions of International Courts and Tribunals, Routledge, 2017, https://doi-org.ezp.lib.cam.ac.uk/10.4324/9781315769639; Dupuy/Viñuales, Harnessing Foreign Investment to Promote Environmental Protection: Incentives and Safeguards, Cambridge University Press, 2013; Elgar, Encyclopedia of Environmental Law, Edward Elgar Publishing Limited, 2016; European Commission, Final report of the High-Level Expert Group on Sustainable Finance, 31 January 2018, https://ec.europa.eu/info/publications/180131-sustainable-finance-report_en; Fisher, Climate Change Litigation, Obsession and Expertise: Reflecting on the Scholarly Response to Massachusetts v. EPA, Law and Policy, 2013; Freestone/Streck, Legal Aspects of Carbon Trading: Kyoto, Copenhagen and Beyond, Oxford University Press, 2009; Gehring/Stephenson/Cordonier Segger, Sustainability Impact Assessments as Inputs and as Interpretative Aids in International Investment Law, Journal of World Investment and Trade 17, * Sincere thanks and recognition are due to Sean Stephenson, Centre for International Sustainable Development Law (CISDL) Research Fellow, for his excellent legal research, substantive insights, and significant contributions to drafting this piece. Thanks and acknowledgements are also due to Natalia Kubesch LLB (KCL), LLM (Cand), University Cambridge and to Sakshi BA, LLB (Hons), BCL (Oxon), MPhil in Environmental Policy (Cand), University of Cambridge, CISDL Researchers, for their excellent legal research and insights on current trends in climate litigation and in the interpretation of the Paris Agreement on climate change.

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The international law and policy implications of climate change litigation p. 155 et seq.; Grantham Research Institute on Climate Change and the Environment, Policy Brief: Global Trends in Climate Change Legislation and Litigation 2017, March 2017; Green Finance Institute, Green Finance and Financing Green, 2019, http://greenfinanceinitiative.org/workstreams/green-finance-taskforce/; Huang, Why transparency makes the Paris Agreement a good deal, Centre for Climate and Energy Solutions, July 2017, https://www.c2es.org/2017/07/why-transparency-makes-the-paris-agreement-a-gooddeal/; ICAO, Carbon Offsetting and Reduction Scheme for International Aviation, https://www.icao.int/ environmental-protection/Pages/market-based-measures.aspx; International Finance Corporation, Climate Change Scenarios – Implications for Strategic Asset Allocation, Mercer, 2011, https://www.ifc.org/wps/wcm/ connect/6b85a6804885569fba64fa6a6515bb18/ClimateChangeSurvey_Report.pdf?MOD=AJPERES; IRENA, Renewable capacity highlights, March 2018, http://sun-connect-news.org/fileadmin/DATEIEN/Dateien/ New/RE_capacity_highlights_2018.pdf; Levashova et al. (eds.), Bridging the Gap Between International Investment Law and the Environment, Eleven International Publishing, 2015; Miles, Dispute Resolution and Climate Change: The Paris Agreement and Beyond, International Chamber of Commerce, 2017; Miles, Research Handbook on Environment and Investment Law, Edward Elgar, 2016. Miles/Swan, Climate Change and Dispute Resolution, 2017; Mooney/Grandoni, New York City sues Shell, ExxonMobil and other oil companies over climate change, The Washington Post, 10 January 2018, https:// www.washingtonpost.com/news/energy-environment/wp/2018/01/10/new-york-city-sues-shell-exxonmobiland-other-oil-majors-over-climate-change/?utm_term=.95770433c1d8; Moraga, Nuevo Marco Legal para el Cambio Climático, LOM 2009; Müller/Michaelowa, How to operationalize accounting under Article 6 market mechanisms of the Paris Agreement, Climate Policy 2019; Nachmany/Setzer, Global trends in climate change legislation and litigation: 2018 snapshot, Grantham Research Institute on Climate Change and the Environment, May 2018, https://www.cccep.ac.uk/wp-content/uploads/2018/04/Global-trends-in-climatechange-legislation-and-litigation-2018-snapshot-2.pdf; Narassimhan et al., Carbon pricing in practice: a review of existing emissions trading systems, Climate Policy, 2018; OECD, Investing in Climate, Investing in Growth, June 2017, https://www.oecd.org/environment/cc/g20-climate/synthesis-investing-in-climate-investing-in-growth.pdf; ClientEarth, Ostrołęka C: Energa’s and Enea’s Board Members’ Fiduciary Duties to the Companies and Shareholders, Briefing, September 2018, https://www.documents.clientearth.org/wpcontent/uploads/library/2018-09-20-clientearth-briefing-ostroleka-c-energa-and-enea-board-members-fiduciary-duties-to-the-companies-and-shareholders-ce-en.pdf; Peel, Issues in Climate Change Litigation, Carbon & Climate Review 5, 2011, p. 11 et seq.; Peel/Orofnosky, A Rights Turn in climate Litigation?, Transnational Environmental Law 7:1, 2018, p. 37 et seq.; Pembina Institute, Environmentalists Win Landmark Oilsands Case, March 2008, https://www.pembina.org/media-release/1600; Peterson, As Another Spain Award Looms, Four More Previously-Confidential Renewable Cases Surface; Potential Liability For All Pending Claims Now Exceeds $9.5 Billion, Investment Arbitration Report, 7 February 2018; Power/ Baker, Energy Arbitrations, The European Arbitration Review, 2018, https://globalarbitrationreview.com/ insight/the-european-arbitration-review-2018/1148943/energy-arbitrations; Rayfuse/Scott (eds.), International Law in the Era of Climate Change, Edward Elgar, 2013; Schill/Tams/Hofmann (eds.), International Investment Law and Development: Bridging the Gap, Edward Elgar, 2015; Sengupta, Treaty to Phase Out “Greenhouse Gasses on Steroids” to Enter Force, The New York Times, 17 November 2017; Herbert Smith Freehills, Exxon Mobil Is Awarded US$1.6 Billion in ICSID Claim against Venezuela – to Be Set off against Award in Parallel Contractual Arbitration, 16 October 2014, https://hsfnotes.com/arbitration/2014/ 10/16/exxon-mobil-is-awarded-us1-6-billion-in-icsid-claim-against-venezuela-to-be-set-off-against-awardin-parallel-contractual-arbitration/; Solomon, Mexican judge rules against higher ethanol mix in gasoline, Reuters, 26 February 2019, https://www.reuters.com/article/us-mexico-oil-ethanol/mexican-judge-rulesagainst-higher-ethanol-mix-in-gasoline-idUSKCN1QF2YT; Tashboya, Kigali Amendment to the Montreal Protocol enters into force in 2019, The New Times, 19 November 2017, https://www.newtimes.co.rw/ section/read/223885; Teng’o, Montreal Protocol celebrates another milestone as agreement to reduce climate-warming gases is set to enter into force in 2019, UN Environment Programme, November 2017, https://www.unenvironment.org/news-and-stories/press-release/montreal-protocol-celebrates-another-milestone-agreement-reduce; The Canadian Press, McKenna says amendment signed to Montreal Protocol, CBC News, November 2017, https://www.cbc.ca/news/politics/mulroney-mckenna-montreal-protocol-1.4409936; UN Environment Programme, Green Foreign Direct Investment in Developing Countries, 2017, http://ccsi. columbia.edu/files/2017/10/Green_Foreign_Direct_Investment_in_Developing_Countries.pdf; UNEP Finance Initiative, Investment Grade Climate Change Policy: Financing the Transition to the Low Carbon Economy, 2011, http://www.unepfi.org/fileadmin/documents/Investment-GradeClimateChangePolicy.pdf; UNFCCC, Adoption of the Paris Agreement, January 2016, COP 1/CP.21; UNFCCC, Modalities and procedures for the effective operation of the committee to facilitate implementation and promote compliance referred to in Article 15, paragraph 2, of the Paris Agreement, March 2019, 20/CMA.1; UNFCCC, Modalities, procedures and guidelines for the transparency framework for action and support referred to in Article 13 of the Paris Agreement, March 2019, 18/CMA.1; UNFCCC, Preparations for the implementation of the Paris Agreement and the first session of the Conference of the Parties serving as the meeting of the Parties to the Paris Agreement, March 2019, COP 1/CP.24; UNFCCC, Report of the Subsidiary Body for

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Part 3. State liability under international and European law Implementation on its forty-sixth session, held in Bonn from 8 to 18 May 2017, June 2017, UN Doc SBI/ 2017/7; United Nations Environment Programme, The Status of Climate Change Litigation – A Global Review, May 2017, https://wedocs.unep.org/handle/20.500.11822/20767; Voight, Research Handbook on REDD+ and International Law, Edward Elgar, 2016; Wedy, Climate Litigation and Litigation in Brazil, Sabin Centre for Climate Change Law, October 2017, https://climate.law.columbia.edu/sites/default/files/ content/Wedy-2017-10-Climate-Legislation-and-Litigation-in-Brazil.pdf; Weikmans/Roberts, Pocket Guide to Transparency under UNFCC, ECBI, 2017; White, Navigating Climate Risk, Ceres, September 2013, https:// static1.squarespace.com/static/57c0a650197aea879e3a81ef/t/58261ad3e6f2e16e929e1130/1478892253649/ Navigating+Climate+Risk-+Ceres’+Primer+for+Family+Offices.pdf.

Contents I. Introduction ..................................................................................................... II. International policy & treaty commitments to climate justice & investment in carbon neutral/negative sustainable development ........ III. Climate change litigation guiding investment risk assessment & decision-making.......................................................................................... IV. Innovations in investment law & policy related to clean energy, climate change and sustainable development........................................... 1. Treaty & policy developments................................................................. 2. Investment treaty disputes........................................................................ V. Conclusions ......................................................................................................

1 4 11 39 40 51 70

I. Introduction The risks and global impacts of climate change are gaining in significance and priority throughout the world, with a majority of countries and enterprises working to redirect investment flows towards more sustainable, low-carbon development pathways, while others face a rising tide of potentially costly litigation on climate change. 2 As reflected in the Paris Agreement on climate change1 and its new ‘Katowice Rulebook’ Paris Agreement Work Programme (PAWP),2 the growing global importance of harnessing higher levels of investment and financing for renewable energy and climate mitigation technologies, as well as climate adaptation and resilience, has never been clearer or more pressing. Indeed, as specific investment needs are being defined and refined in the National Determined Contributions (NDC) to the global response to climate change that each country intends to achieve under the Paris Agreement,3 many government authorities and policy-makers, alongside public and private enterprises, seek to grow the scope and scale of new ‘green economy’ investment opportunities in this field.4 Indeed, renewable generation capacity increased by 8.3 % in 2017, and by a further 7.9 % in 2018, continuing the trend of 7–9 % annual capacity growth in recent years.5 1

1 UNFCCC, Decision 1/CP.21: Adoption of the Paris Agreement (29 January 2016) UN Doc CP/2015/ 10/Add.1, Annex Art. 2.1(c), (Paris Agreement). 2 UNFCCC, Decision 1/CP.24: Preparations for the implementation of the Paris Agreement and the first session of the Conference of the Parties serving as the meeting of the Parties to the Paris Agreement (19 March 2019) UN Doc CP/2018/10/Add.1, (Katowice Rulebook). 3 For the interim NDC Registry see https://unfccc.int/process/the-paris-agreement/nationally-determined-contributions-ndcs#eq-2. 4 Global investment in renewable energy has exceeded $240 billion per year for the last decade. In 2017, the total of $279.8 billion was 2 % higher than the 2016 equivalent, while lower than $323.4 billion in 2015. Fortunately, drastic reductions in capital and generating costs for renewables have been instrumental in broadening the markets for these technologies. 5 See International Renewable Energy Agency (IRENA), Renewable capacity highlights, March 2018, available at: http://sun-connect-news.org/fileadmin/DATEIEN/Dateien/New/RE_capacity_highlights_2018. pdf.

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However, in its landmark report ‘Investing in Climate – Investing in Growth,’ the 3 Organization for Economic Co-operation and Development (OECD) noted that to meet the targets set out in the global Sustainable Development Goals (SDGs), and to achieve the high international ambition of the Paris Agreement, further exponential increases are essential for investment in low-carbon green growth, including climate-smart projects and infrastructure, particularly in developing countries.6 In this chapter, we argue that recent trends in both climate change and energy litigation and arbitration can support global efforts, as per the Paris Agreement, to enhance the implementation of the UN Framework Convention on Climate Change (UNFCCC), including its objective, by aiming ‘to strengthen the global response to the threat of climate change, in the context of sustainable development and efforts to eradicate poverty, including by… (c) Making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development.’7

II. International policy & treaty commitments to climate justice & investment in carbon neutral/negative sustainable development States’ obligations under SGD 7 to ‘ensure access to affordable, reliable, sustainable, 4 and modern energy for all’, SGD 13 to ‘take urgent action to combat climate change and its impacts’, and the high level of international ambition prescribed under the Paris Agreement can be achieved through a rapid increase of investment into carbon neutral and negative sustainable development projects. The UNFCCC negotiations on modalities and guidelines for Paris Agreement implementation are significant for both future development of investment law and for climate and energy policy. At the 24th UNFCCC Conference of the Parties (CoP) in Katowice, key aspects of these guidelines were agreed by the ‘Conference of the Parties serving as the Meeting of the Parties to the Paris Agreement’ (CMA), highlighting advances that have been achieved with regard to climate mitigation, adaptation and transparency,8 and these advances were not significantly altered in the 25th UNFCCC Conference of the Parties in Madrid under the Chilean Presidency. Under the Paris Agreement, States ‘should’ further provide information on climate 5 change related impacts and adaptation, and their reports on mitigation action and support will undergo a technical expert view. Overall, this adaption-related information has certain advantages for investors, and for public investment authorities seeking to encourage financial flows to key sectors. For instance, such transparency can help States to understand whether international adaptation finance is effective and to learn from each other on how to increase infrastructure, agriculture, renewable energy or other investments to levels required to meet climate mitigation and adaptation objectives.9 For instance, at the 46th session of the Subsidiary Body for Implementation (SBI), India, one of 29 countries undergoing peer review on the steps they have been taking to reduce greenhouse gas emissions and build resilience, offered an intervention on the benefits of 6 Organization for Economic Co-operation and Development (OECD), ‘Investing in Climate, Investing in Growth’ (June 2017) https://www.oecd.org/environment/cc/g20-climate/synthesis-investing-in-climate-investing-in-growth.pdf. 7 Paris Agreement, supra (fn. 1). 8 This analysis is due to the helpful legal research and excellent scholarly drafting work of Natalia Kubesch, CISDL Researcher, University of Cambridge and Sakshi, CISDL Researcher, University of Cambridge, in 2018. 9 Weikmans/Timmons Roberts, Pocket Guide to Transparency under the UNFCC, (2017) European Capacity Building Initiative (ECBI) 36.

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this ‘facilitative sharing of views’.10 They presented an ambitious target to achieve a renewable energy capacity of 175,000 MW by 2022, predominantly through solar power plants, particularly with the Jawaharlal Nehru National Solar Mission, whose 100,000 MW capacity was central to achieving this target. Developed and developing countries alike were interested in how India advanced this energy policy in a short timeframe and how the federal government was working with local governments and the private sector, including investors.11 6 On transparency actions such as reporting, the Paris Agreement requires that all States ‘shall’ provide national inventory reports and submit information that allows tracking the progress towards achievement of their NDCs to the objectives of the treaty.12 At CoP21 in Paris, the States accepted that ‘the transparency framework shall provide flexibility’ to developing countries.13 The modalities, procedures and guidelines in the Katowice Rulebook reflect the flexibility needed by developing States to implement Article 13 and build their ‘transparency-related capacity’,14 by prescribing mechanisms to provide technical advice and support in their efforts.15 These guiding principles recognize the special circumstances of small island developing states (SIDS) and least developed countries (LDCs),16 specifying the flexibility to be afforded to developing parties in light of their respective capacities,17 and stating that the availability and application of these provisions are to be self-determined.18 Under this framework, developing States highlight the flexibility provision to be applied, outline their capacity constraints and determine an ‘estimated time frames for improvements to those capacity constraints.’19 Where such a provision has been applied by a developing country, a technical expert review team may not assess the State’s decision to apply it or evaluate whether they had the capacity to implement the agreement without this flexibility.20 Greater transparency also encourages confidence and trust among States Parties to the Paris Agreement, enabling them to learn from each other’s experiences in an open way.21 As such, allowing for discretionary reporting may be problematic for investment if it impedes the emergence of a clear picture of the international climate finance landscape.22 At CoP24 in Katowice, it was decided that developing countries may submit information on ‘financial, technology transfer, and capacity-building support needed and received’23 at their own discretion.24 While it is crucial that ‘common but differentiated responsibility’ be respected, greater transparency in this regard 10 UNFCCC, Report of the Subsidiary Body for Implementation on its forty-sixth session, held in Bonn from 8 to 18 May 2017 (30 June 2017) UN Doc SBI/2017/7. 11 Huang, Why transparency makes the Paris Agreement a good deal, Centre for Climate and Energy Solutions, 2017, available at https://www.c2es.org/2017/07/why-transparency-makes-the-paris-agreementa-good-deal/. 12 Paris Agreement, supra (fn. 1), art. 13. 13 Ibid. art. 13(2). 14 UNFCCC, Decision 18/CMA.1 Modalities, procedures and guidelines for the transparency framework for action and support referred to in Article 13 of the Paris Agreement (19 March 2019) UN Doc PA/CMA/2018/3/Add.2, annex 7, (18/CMA.1). 15 Ibid. para. 15(a). 16 Ibid. para. 3(a). 17 Ibid. para. 3(c). 18 Ibid. para. 6. 19 Ibid. 20 Ibid. 21 Cook, The Progressive Approach and the Paris Agreement, in: Miles, Dispute Resolution and Climate Change: The Paris Agreement and Beyond, International Chamber of Commerce, 2017. 22 Weikmans, supra (fn. 9), 34. 23 Paris Agreement, supra (fn. 1), art. 13(10). 24 18/CMA.1, supra (fn. 14) 4.

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provides the ability to accurately assess the climate finance landscape which helps determine the most cost effective climate change projects and identify gaps in available finance, opening new opportunities and avoiding the duplication of efforts. A further important element of the Paris Agreement, in Article 15, is elaboration of a 7 mechanism to promote compliance and implementation of the treaty, and this was further detailed in the outcomes of the Katowice CoP24. The mechanism itself is a geographically balanced Committee consisting of twelve members with ‘recognized competence in…scientific, technical, socioeconomical, or legal fields’.25 While the Committee continues to elaborate its own rules of procedures, subject to approval by the CMA, it is intended to operate in a ‘facilitative…transparent, non-adversarial, and non-punitive’26 manner, ensuring that the ‘respective national capabilities and circumstances of the Parties’ are accounted for.27 The Committee is mandated with bringing States into compliance where they have not fulfilled the binding obligations of the Paris Agreement, namely, to ‘prepare, communicate and maintain’ successive NDCs, periodically report on their emissions and progress towards achieving the outlined goals in their NDC, and submit consecutive NDCs whose ambition does not fall below that of a previous one. Consequently, the permitted circumstances in which the Committee may respond to cases of non-compliance are reflective of these obligations. The Committee may respond to non-compliance through a ‘self-triggering’ mechanism prompted by a written submission from a State with respect to its own implementation and compliance or,28 by a Committee decision to initiate such proceedings. The latter may done where a State has failed to communicate or maintain an NDC,29 submit a mandatory report or communication of information,30 or participate, on the basis of information provided by the secretariat, in the facilitative, multilateral consideration of progress.31 Additionally, where there has been ‘significant and persistent’32 inconsistencies in the information submitted by a State, the Committee may, with the consent of the relevant State, engage in a consideration of these issues, based on recommendations made by the technical expert review and the State’s written submission.33 In line with its role as facilitative, non-punitive body, the aim of the Committee is to help bring States into compliance, rather than punish them for previous failures. The measures they may take include engaging in a dialogue with the relevant State to identify obstacles to compliance,34 recommend an action plan,35 and assist the State with engaging with the appropriate finance or capacity-building bodies to facilitate compliance.36 The Committee may also identify systemic issues plaguing a number of States, and bring these issues, and solutions to the CMA.37 Evidently, the Committee will not operate as a forum for conflict or dispute settlement, and does not exist to impose sanctions or 25 UNFCC, Decision 20/CMA.1: Modalities and procedures for the effective operation of the committee to facilitate implementation and promote compliance referred to in Article 15, paragraph 2, of the Paris Agreement (19 March 2019) UN Doc PA/CMA/2018/3/Add.2, annex, 5 (20/CMA.1). 26 Ibid. 2. 27 Ibid. 17. 28 Ibid. 20. 29 Ibid. 22(a)(i). 30 Ibid. 22(a)(ii) and (iv). Mandatory information pursuant to Paris Agreement: art. 13(7) and 13(9) and art. 9(5) and 9(7). 31 Ibid. 22(a)(iii). 32 Ibid. 22(b). 33 Ibid. 22(b). 34 Ibid. 30(a). 35 Ibid. 30(d). 36 Ibid. 30(b). 37 Ibid. 32.

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penalties.38 Implementation of the Paris Agreement depends on deepening international cooperation over time, reliable access to climate finance and other support, as well as public pressure, backed by expert, business, youth and civil society collaboration, among other elements, to ensure the rapid scaling up of ambition.39 Greater transparency can impact compliance and implementation, and also the means of settling any international disputes on climate change. The Paris Agreement assists States to consider and verify each other’s contributions to climate change, heightening accountability.40 State actions increasingly come under scrutiny, as the transparency framework provides countries and wider stakeholders with information on national decisions, on regulations, investments, and measures to protect local populations or the way companies are regulated. States or private entities may decide to study and rely on this information in challenging States’ failure to comply with their responsibilities under the Paris Agreement, or to otherwise provide reasonable measures to address climate change. For investors, the implication is centrally one of increased risk for those still insisting on obsolete technologies and fuels. As such, greater transparency can trigger dispute settlement proceedings regarding state’s non-compliance with mitigation/adaptation commitments. Indeed, there is the possibility that the transparency required under climate agreements can facilitate claims under investment treaties by private investors based on failure to abide by mitigation/adaptation-related commitments. However, in terms of investor-state arbitration, the question arises whether this dispute settlement process will further or impede the objectives of the Paris Agreement.41 Although disputes directly challenging environmental standards are rare, as the climate space continues to grow, climate related or adjacent disputes related to contract and market mechanisms may expand. One question that remains is whether disputes between states and private entities will drive fragmentation in international law, and not give sufficient weight to the importance of the delivery of tailored, country-specific NDCs. 8 Further, at the international level, other international treaty regimes and institutions also play a role in fostering climate friendly investment. For example, the Kigali Amendment to the Montreal Protocol, which directly seeks to discourage investments in ozone-depleting substances that are also likely to have serious effects on global climate change,42 passed its ratification threshold in 2017. The accord, which seeks to phase down climate-warming hydrofluorocarbons (HFCs) under the Montreal Protocol on Substances that Deplete the Ozone Layer, entered into force on 1 January 2019. Firms that produce and use coolants in their products will need to develop alternative technologies in order to gain access to a new global market for replacement coolants and continue to participate in the growing market for refrigerators and air conditioning. States committed to phase out HFCs gradually by more than 80 % over a 30-year period, along four tracks of ‘Article 5 Parties’ which reflect nuanced differences between nations, particularly their varying economic circumstances, reliance on HFC technologies, and the cost of alternative technologies. Many high-income countries will cut HFCs from 2019, consuming no more than 15 % of their 2011–2013 averaged baseline 38 Centre for Climate and Energy Solutions, Outcomes of the U.N. Climate Change Conference in Bonn, Centre for Climate and Energy Solutions, November 2017, available at https://www.c2es.org/site/ assets/uploads/2017/11/outcomes-of-the-u-n-climate-change-conference-in-bonn.pdf. 39 Ibid. 40 Kate Cook, Interview with Wendy Miles QC and Angeline Welsh, Arbitration and climate change, The Law of Nations Podcast, November, 2017. 41 Ibid. 42 Kigali Amendment (23 November 2016) to the Montreal Protocol on Substances that Deplete the Ozone Layer (16 September 1989) 1522 UNTS 3, entered into force 5 May 1992.

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emissions by the year 2036. States will receive support through the Montreal Protocol’s Multilateral Fund. Montreal Protocol transitions from controlled substances to new alternatives have often been completed ahead of schedule. The incentive for countries to ratify and comply with the Kigali Amendment is strong. Following the Montreal Protocol’s practice of restricting trade in controlled substances between parties and non-parties, the amendment foresees implementing trade restrictions on HFCs with non-parties by 2033, provided that at least 70 countries have ratified the deal. The protocol’s trade element is an innovative feature that has ensured very broad support for the accord and all its amendments, as ICTSD has noted.43 The Kigali Amendment is estimated to prevent up to 0.5 degrees Celsius in global warming above pre-industrial levels by the end of the century. As an additional note, the International Civil Aviation Organization (ICAO) has also 9 further progressed in developing its climate investment policy, particularly through the establishment of a new Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), which if implemented effectively, holds the potential to raise important revenues for climate finance, and to change the direction of future investments in aviation towards more the adoption of renewable fuels and practices.44 In essence, although the obligations of the Paris Agreement are not designed to 10 dictate the actions should take with regard to climate action, the treaty may well lead to opportunities, both at international and also national levels, for climate litigation and dispute settlement to play an increasing crucial role in advancing the aims of the Paris Agreement.

III. Climate change litigation guiding investment risk assessment & decision-making Of potential relevance to investors, and international investment law, several major 11 climate change litigations are being advanced, with the first few ‘wins’ in a growing flood of lawsuits. Indeed, some 1744 climate change cases had been filed by March 2020 in 34 countries in Africa, Asia, Pacific, Europe and the Americas. The United States had the highest number of cases at 1393, according to the UN Environment Program and the Sabin Center for Climate Change Law at the University of Columbia Law School.45 A new wave of emerging cases is querying the roles of States, as well as public and 12 private enterprise, in implementing climate change laws and policies to prevent dangerous impacts.46 The judicial decision and court filings reveal several trends with implications for investment policies.

43 Teng’o, Montreal Protocol celebrates another milestone as agreement to reduce climate-warming gases is set to enter into force in 2019, UN Environment Programme, 20 November 2017, https://www.unenvironment.org/news-and-stories/press-release/montreal-protocol-celebrates-another-milestone-agreementreduce; The Canadian Press, McKenna says amendment signed to Montreal Protocol,’ CBC News, 20 November 2017, https://www.cbc.ca/news/politics/mulroney-mckenna-montreal-protocol-1.4409936; Sengupta, Treaty to Phase Out “Greenhouse Gasses on Steroids” to Enter Force, The New York Times, 17 November 2017; Tashobya, Kigali Amendment to the Montreal Protocol enters into force in 2019, The New Times, 19 November 2017, https://www.newtimes.co.rw/section/read/223885. 44 ICAO, Carbon Offsetting and Reduction Scheme for International Aviation, https://www.icao.int/ environmental-protection/Pages/market-based-measures.aspx. 45 Sabin Center for Climate Change Law, Climate Change Database: US and Non-US Climate Change Litigation, http://climatecasechart.com/ (accessed 11 March 2020). 46 Miles/Swan, 11(2) Dispute Resolution International 117.

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First, a significant proportion of claims exhibit a tendency to focus on failures of institutions and nations to adequately consider climate change risks and impacts in policy and planning.47 The last decade has yielded a variety of successful challenges to government environmental assessment and permitting processes for major development and energy infrastructure projects on grounds of insufficient regard for climate change, from the perspectives of both mitigation and adaptation. 14 For instance, in Pembina Institute for Appropriate Development and Others v. Attorney General of Canada and Imperial Oil, the Federal Court of Canada found a government joint review panel to have erroneously approved the proposed extraction of tar sands oil near Kearl Lake in the Athabasca Oil Sands region.48 The 2008 ruling held that the panel had failed to ‘provide a cogent rationale for its conclusion that adverse environmental effects of the greenhouse gas emissions of the Project would be insignificant,’ while neglecting to comment on potential mitigation strategies.49 Indeed, while the project has proceeded in subsequent years, the decision marked the first successful appeal of a joint panel assessment and clearly established that engagement in a ‘science and fact-based assessment’ of climate impacts falls within the purview of environmental assessment.50 15 In Wade v. Warrnambool CC and Anor (2009), the Civil and Administrative Tribunal in Victoria, Australia overturned planning permits that had been issued by the Warrnambool City Council permitting the development of a residential area on lowlying wetlands.51 The tribunal asserted that these permits were in contravention of the state’s Planning and Environment Act, as the Council neglected to take adequate account of sea level rise projections and associated flood and storm surge risks at the site under climate change.52 The case illustrates the prominence of adaptation-based arguments, which have increased in prevalence in recent years.53 16 At the international level, the 2015 Paris Agreement emerged as a novel anchorage for lawsuits of this kind, giving shape and legal significance to national mitigation commitments.54 Moreover, the Agreement seems to provide momentum within a growing climate law and governance community.55 In the 2017 Vienna Schwechat Airport Expansion56 case, for instance, several NGOs persuaded the Austrian Administrative Court that the expansion of the Vienna airport would jeopardize the emission reductions targets set forth inter alia in the Paris Agreement. Concurrently, in the EarthLife Africa Johannesburg v. Minister of Environmental Affairs and Others proceedings, the South African High Court found ‘comprehensive assessment’ of climate change impacts to be relevant and requisite components of environmental review for the proposed Thabametsi Power Project, a coal-fired installation of 1200 MW.57 Although 13

Peel, Carbon & Climate Law Review, 2011, 5, 15 et seq. Pembina Institute for Appropriate Development and Others v. Attorney General of Canada and Imperial Oil [2008] FC 302. 49 Ibid. at paragraph 70. 50 Ibid. at paragraph 72; “Environmentalists Win Landmark Oilsands Case” (Pembina Institute) https:// www.pembina.org/media-release/1600 accessed March 20, 2020. 51 Wade v. Warrnambool CC & Anor [2009] VCAT 2177. 52 Ibid. 53 Climate Change Database: US and Non-US Climate Change Litigation, supra (fn. 45). 54 Peel, supra (fn. 47). 55 “The Status of Climate Change Litigation – A Global Review” (United Nations Environment Programme; May 2017) https://wedocs.unep.org/handle/20.500.11822/20767 accessed March 20, 2020. 56 Vienna Airport Expansion, W109 2000179-1/291E, Federal Administrative Court, Austria (2 February 2017). 57 Earthlife Africa Johannesburg v. Minister Of Environmental Affairs and Others [2017] ZAGPPHC 58 (2017) 65662/16, at paragraph 20. 47 48

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the statute in question, the National Environmental Management Act (NEMA),58 did not explicitly address climate change, the Court reasoned that South Africa’s emissions reduction commitments under its Paris Agreement NDC necessitated the consideration of climate change under the statutory review process.59 As such, approval for the project was deemed unlawful over the objections of the Minister of Environmental Affairs.60 Further, in Plan B Earth and Others v. Secretary of State for Transport,61 the Court of 17 Appeal for England and Wales held that the British government’s national policy statement authorizing the expansion of runways at Heathrow International Airport failed to appropriately consider Paris Agreement goals as expressed in the UK’s NDC. The failure to take climate change impacts into consideration, resulted in the proposed expansion being found in violation of the Planning Act (2008), which mandates the performance of a strategic environmental assessment as set forth by EU Council Directive 2001/42/EC. As such, the government’s approval of a new runway was struck down pending a review of the national policy statement consistent with the Planning Act, which must weigh Paris goals, including ‘non-carbon dioxide climate impacts of aviation,’ in future analysis.62 These cases illustrate how national litigation may be used as ‘climate swords’63 to 18 promote more progressive climate law and regulation. These legal actions, regardless of their outcomes, provide certainty and predictability of the domestic climate frameworks on which investors base their decisions. Successful challenges can compel States to fulfil their international climate change obligations and could, as a result, incentivize investment into renewable energy and discourage or prohibit investment into environmentally harmful activities. While there are concerns that national climate litigation could trigger investment claims where judicial decisions initiate legal changes that disadvantage the fossil fuel industry, a successful outcome could oblige a government to suspend guarantees or promises made to investors. This raises questions about whether a carbon-intensive investment, in light of the Paris Agreement and other decisions above, is truly in ‘like circumstances’ to investment which supports renewables and other lowcarbon pathways.64 Overall, these cases highlight the evolving contours of climate change litigation in 19 generating increasingly forceful linkages between national legislation and policy goals, and international processes under the Paris Agreement. Indeed, recent cases suggest litigation is effective in ensuring the credibility of NDC pledges and that it will be an integral mechanism to guarantee a global scale-up of climate ambition consistent with a 1.5°C warming target.65 While legal efforts along these lines have already enjoyed 58

NEMA 1998. Supra (fn. 80) at paragraph 35. 60 Ashukem, 13 Law, Environment and Development Journal 35. 61 Plan B Earth and Others v. Secretary of State for Transport [2020] EWCA Civ 214. . 62 Ibid. at paragraph 13(1). 63 Gerrard/Wilensky, The Role of the National Courts in GHG Emissions Reductions in: Elgar Encyclopedia of Environmental Law. 64 For further discussion, see, e.g., Cordonier Segger/Gehring, Climate Change and International Trade and Investment Law, in: Rayfuse/Scott, International Law in the Era of Climate Change; Cordonier Segger/Gehring, Making Progress? Climate Change, Sustainable Development and International Trade and Investment Law, in: Streck/Freestone, Legal Aspects of Carbon Trading: Kyoto, Copenhagen and Beyond; Cordonier Segger, Sistemas de inversión y comercio para economías bajas en emisiones de carbono más sustentables, in: Moraga, Nuevo Marco Legal para el Cambio Climático, LOM 2009. 65 Nachmany/Setzer, Global trends in climate change legislation and litigation: 2018 snapshot (Grantham Research Institute on Climate Change and the Environment; May 2018) https://www.cccep.ac.uk/ wp-content/uploads/2018/04/Global-trends-in-climate-change-legislation-and-litigation-2018-snapshot2.pdf accessed March 20, 2020. 59

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moderate success to date, it is anticipated that continuous reinforcement of the scientific consensus and civil society movements driving a public sense of urgency for climate action will enhance the legal foundation of future claims seeking to hold governments accountable to their national and international adaptation and mitigation obligations.66 20 Second, cases increasingly focus on constitutional rights to a clean and healthy environment, seeking to hold authorities accountable for violation of universal values of human rights, and more specifically, national climate policies.67 Thus, recent lawsuits on climate change have not only provided a judicial forum to further greater ‘physical and social understanding of climate change’,68 but also indicate a trend towards a human rights framework and approach.69 However, the success rate of these cases has been mixed, depending on the adjudication forum. While national courts may find for the climate and for peoples’ rights in accordance with the local law, some remain reluctant to find violations by governments. This trend, of course, could be directly relevant to risk analysis among investors already facing concerns and reputational losses in relation to their human rights records. 21 Among early rights-based climate litigations of note is Gbemre v. Shell Petroleum Development Company of Nigeria Ltd. and Others (2005), before the Federal Court of Nigeria. The case concerned the livelihoods of the Iwherekan people, a farming and fishing community in Nigeria’s Delta State which contended gas flaring practices from major oil development projects in the region infringed upon their fundamental rights of life (including healthy environment), and dignity of human persons. The Court reasoned that flaring ‘endangers and diminishes life, and does not lead to its full enjoyment’70 given the adverse impacts of associated air pollution on respiratory health, crop production and food security, local vegetation and ecosystems, and greenhouse gas emissions.71 By extension, the Court held continued gas flaring to be unconstitutional under relevant provisions of the Federal Republic of Nigeria and the African Charter on Human and Peoples Rights.72 22 Recognizing the importance of place to the enjoyment of human rights, the case of AD (Tuvalu) (2014) anticipates an expanding legal discourse at the intersection of climate change and immigration. The ruling by the Immigration and Protection Tribunal of New Zealand concerns a family facing deportation to Tuvalu following the denial of resident visas.73 Upholding as ‘widely accepted’ the notion that ‘climate change can adversely affect the enjoyment of basic human rights,’ the Tribunal sympathized with the family’s claims that deportation would expose them to significant climate change vulnerability.74 These circumstances, inter alia, were deemed sufficient to constitute ‘exceptional circumstances of a humanitarian nature,’ negating the family’s removal from New Zealand under the 2009 Immigration Act.75 Banda/Fulton, 47 Envtl L Rep News & Analysis 10121. Climate Law & Governance Initiative (CLGI), in partnership with the UN Framework Convention on Climate Change (UNFCCC), online: http://www.climatelawgovernance.org/. See also Grantham Research Institute on Climate Change and the Environment, Policy Brief: Global Trends in Climate Change Legislation and Litigation 2017, (March 2017). This repository of climate litigations worldwide pegs the number of cases globally at 250 across 25 different jurisdictions. 68 Fisher, 35 Law and Policy 236. 69 Peel/Orofnosky, Transnational Environmental Law, 7:1, 37 et seq., 2018. 70 Gbemre v. Shell Petroleum Development Company of Nigeria Ltd. and Others [2005] FHC/B/CS/53/ 05, at para. 14. 71 Ibid. para. 7 (c). 72 Ibid. para. 1. 73 AD (Tuvalu) [2014] NZIPT 501370-371. 74 Ibid. para. 28. 75 Ibid. para. 2. 66 67

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More recent cases have broken open a series of subsequent legal claims on human 23 rights grounds. In the landmark 2015 case Ashgar Leghari v. Federation of Pakistan76, a farmer sued the Pakistani government for failing to carry out its Framework for Implementation of Climate Change Policy (2014- 2030) and National Climate Change Policy (2012). In a decision focusing on the adequacy of the government’s adaptation programs, the Lahore High Court found the Pakistani government liable for taking insufficient action to protect the rights of its citizens as codified in articles 9 (right to life), 14 (human dignity), 19(a) (information) and 23 (property) of Pakistan’s constitution.77 Opining that the ‘the delay and lethargy of the State in implementing the Framework offend the fundamental rights of the citizens,’ the court ordered the government to appoint a climate change focal person for many government ministries, with a list of action points, and to create a multi-stakeholder Climate Change Commission to oversee the government’s progress.78 Similarly, the case of Urgenda Foundation v. State of the Netherlands – a series of 24 decisions spanning district and appeals courts in the Hague, and the Supreme Court of the Netherlands between 2015 and 2019 – is among the most prominent to use a human rights lens to consider national obligations toward climate change mitigation. As the first decision to compel national efforts to reduce emissions under the legal force of customary norms of international law, the initial ruling invoked the no harm and prevention principles, and the precautionary approach, to mandate a national commitment to lower GHGs by 25 % from a 1990 base year by 2020.79 Finding the government’s present mitigation trajectory incompatible with Paris Agreement goals, the district court’s ruling was upheld on appeal with the reasoning that the current ‘emission level is unlawful […] contrary to the duty of care exercised [under] Articles 2 and 8 of the European Convention on Human Rights (ECHR),’ which protect rights to life and private life.80 Emphasizing that the global nature of climate change does not excuse the Dutch government from an obligation to do its part pursuant to Articles 2 and 8 of ECHR, the Supreme Court affirmed core aspects of the decision, asserting that ‘dangerous climate change could have a severe impact on the lives and welfare of the residents of the Netherlands.’81 While Ashgar and Urgenda demonstrate the effectiveness of human rights-based 25 arguments in ensuring state accountability to address climate change and have spurred additional momentum for litigation in this vein, parallel approaches have been met with scepticism in some cases. In March 2017 an Irish environmental charity challenged a council’s decision to issue a five-year extension to the Dublin Airport Authority for their planning permission to construct a new runway.82 While the Court recognized ‘a personal constitutional right to an environment under the Irish Constitution’, it did not find any violation of this right.83 It was observed that the exercise of powers in the present case did not constitute any departure from the objectives set out in the Climate Action and Low Carbon Development Act 2015, which the petitioners had alleged to be breached by the impugned conduct. This pattern of reasoning was similarly held in Greenpeace Norway v. Government of Norway when the Oslo District Court rejected the NGO’s argument that Norway’s oil and gas exploration in the Arctic violated citizens’ 76

Leghari v. Federation of Pakistan [2015] W.P. No. 25501/201. Ibid. para. 7. 78 Ibid. para. 1. 79 Urgenda Foundation v. State of the Netherlands [2015] HAZA C/09/00456689. 80 Ibid. para. 3(3). 81 Ibid. see paragraphs 8.1–8.3.5. 82 Friends of the Irish Environment CLG v Fingal County Council [21 November 2017] No. 201 JR. 83 Ibid. para. 241. 77

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right to a clean environment, despite finding that such right was protected by the Constitution.84 In contrast, South Africa’s High Court accepted the claimants’ argument that in failing to consider climate change-related impacts when approving the building of coal plant, the government had violated fundamental rights. It therefore invalidated the plant’s approval.85. This sends a message to governments and developers/investors proposing projects with potentially significant climate change impacts in South Africa that permission for such projects is contingent on proper climate change impact assessments. 26 Following this trend, in the 2019 decision in ENvironnement JEUnesse v. Procureur General du Canada,86 the Superior Court of Québec upheld climate change impacts on fundamental rights as justiciable under the Canadian Charter of Rights and Freedoms, even while declining to effectuate a class action against the Canadian government on behalf of Quebec citizens younger than 35. The case retains broader relevance as nonstate actors look to pursue various forms of collective action to protect investments from climate risks under emerging rights-based arguments. Building on this decision, in January of 2020, the Supreme Court of Mexico nullified a rule promulgated by the country’s Energy Regulatory Commission which would have permitted an increase in the maximum allowable ethanol content in gasoline from 5.8% to 10%.87 Acknowledging the agency’s economic rationale to lower fuel costs, the Court emphasized the application of the precautionary principle in upholding the right to a healthy environment, thereby requiring more thorough evaluation of ethanol’s environmental consequences, including GHG emissions associated with fuel combustion. The ruling is particularly significant in light of American interests in exporting high ethanol content fuels, and signals to investors that human rights-based rationales must be demonstrated by those seeking access to the Mexican market.88 27 Considered cumulatively, these cases establish the extent to which reliance on rightsbased approaches is becoming more common among those challenging governments’ failure to mitigate climate change, including state decisions to allow private entities to conduct environmentally harmful activities. Significantly, these cases reveal numerous potential tensions between states’ constitutional obligations towards their citizens as interpreted by national courts, and their investment treaty commitments towards international investors. Human rights will likely become further entrenched in future climate litigation, given definitive recognition of a range of fundamental rights across fora of adjudication89 and the clarity of enforcement mechanisms in international human rights regimes.90 Correspondingly, heightened attention to the nexus between climate change and human rights has the potential to shape the direction of ongoing human rights conversations in Geneva toward a more explicitly climate-sensitive view. Indeed, as climate change impacts grow in magnitude and severity, rights-based 84 Föreningen Greenpeace Norden & Natur og Ungdom v The Government of Norway through the Ministry of Petroleum and Energy Case no:16-166674TVI-OTIR/06. 85 Earthlife Africa Johannesburg, supra (fn. 79). 86 ENvironnement JEUnesse v. Procureur General du Canada [2018] 500-06-000955-183. 87 Ruling on Modification to Ethanol Fuel Rule [2019] 610/2019. 88 Solomon, Mexican judge rules against higher ethanol mix in gasoline, Reuters, February 26 2019) https://www.reuters.com/article/us-mexico-oil-ethanol/mexican-judge-rules-against-higher-ethanol-mixin-gasoline-idUSKCN1QF2YT accessed March 20, 2020. 89 Peel/Osofsky, 7 Transnational Environmental Law 37. 90 Setzer/Byrnes, Global trends in climate change litigation: 2019 snapshot, Grantham Research Institute on Climate Change and the Environment, July 2019, http://www.lse.ac.uk/GranthamInstitute/ wp-content/uploads/2019/07/GRI_Global-trends-in-climate-change-litigation-2019-snapshot.pdf accessed March 20, 2020.

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jurisprudence on the governance of human-natural systems appears among the most promising channels to further implementation of the Paris Agreement.91 Third, claimants have brought cases against individual emitters, alleging that their environmentally harmful activities have caused them particular injuries. This category encompasses cases brought by private individuals and by state authorities against private corporations. In (2007), the Brazilian Supreme Court upheld a federal trial court decision which demanded restoration of an urban mangrove forest that defendants had converted to a landfill, in violation of guidance by local environmental authorities and Article 225 of the Federal Constitution of 1988.92 The Supreme Court opinion specifically highlighted relevant science affirming the ‘ecological, economic, and social’ functions of mangrove forests ‘especially in times of climate change and rising sea levels.’93 The case illustrates that private actors must take the climate change impacts of their activities into account so as to refrain from ‘serious harm to the ecologically balanced environment and to the welfare of the collectivity.’94 In Deutsche Bank AG v. Total Global Steel Ltd. (2012), the High Court of Justice in London found that Total Global Steel’s sale of already ‘surrendered’ Certified Emissions Reductions (CERs) to Deutsche Bank constituted a violation of European Commission regulations for emissions trading under the European Union Emissions Trading System (EU-ETS).95 The ruling established that abuse of CER transfer among private parties is in contravention of EU Scheme Directive 2003/87/EC ensuring that ‘no transfers which are incompatible with obligations resulting from the Kyoto Protocol.’96 The case demonstrates that emitters will be held liable for damages in cases of non-compliance with market mechanisms for GHG reduction, and is particularly relevant given the increasing scope of regional emissions trading markets,97 and ongoing negotiations in the UNFCCC toward modalities for voluntary international cooperation with implications for global carbon markets.98 In Lliuya v RWE (2016), a Peruvian farmer sued the German energy firm RWE, seeking USD 21,000 towards flood damage prevention from glacial melt caused by the company’s contribution to climate change. While initially dismissed, on appeal in in November 2017, his demand was held admissible, allowing the case to proceed into the evidentiary phase.99 The German Appellate Court decided that despite the lack of evidence to prove linear causality directly attributing the entire flood risk posed to Lliuya’s hometown by RWE’s GHG emissions alone, it was sufficient to prove a ‘partial causation’.100 The case demonstrates that private companies can be held liable for the climate change-related damages arising from their greenhouse gas emissions. This recognition may prove significant to a number of recently filed climate litigation cases in the US, in which municipalities, provincial and State governments are suing private enterprises for their contribution to climate change, and non-governmental organiza91

Supra (fn. 107). Wedy, Climate Legislation and Litigation in Brazil, Sabin Center for Climate Change Law, October 2017, https://climate.law.columbia.edu/sites/default/files/content/Wedy-2017-10-Climate-Legislationand-Litigation-in-Brazil.pdf accessed March 20, 2020. 93 Ibid. 94 Ibid. 95 Deutsche Bank AG v. Total Global Steel Ltd. [2012] EWHC 1201 (Comm). 96 Ibid. 97 Narassimhan et al., 18 Climate Policy 967. 98 Müller/Michaelowa, 19 Climate Policy 812. 99 Beschluss des 5. Zivilsenats des Oberlandesgerichts Hamm vom 01.02.2018 in dem Rechtsstreit Lliuya ./. RWE AG (Az. 5 U 15/17 OLG HAMM). 100 Ibid. 92

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tions and individuals are suing governments or public enterprises for failing to fulfil climate obligations under national and international laws and conventions, respectively.101 32 In light of Lliuya v RWE, other notable cases include New York City’s action against Shell, Exxon Mobil Corporation and others, claiming that they are responsible for damage caused due to flooding during Hurricane Sandy;102 and County of San Mateo v Chevron Corp which involves an action by Californian local governments seeking damage and other relief from fossil fuel companies for sea level rise, focused in particular on Chevron103 and British Petroleum.104 33 In more recent developments, the Regional Court in Poznań (Poland), in its August 2019 ruling in the case of ClientEarth v Enea,105 invalided the Polish utility Enea SA’s authorization for the construction of a 1 GW capacity coal-fired power plant. The litigation was based on the Polish Commercial Companies Code, with ClientEarth claiming that the construction of the new coal power plant would harm the economic interests of the company as a result of climate-related financial risks. According to ClientEarth, Enea’s actions ‘risk breaching board members’ fiduciary duties of due diligence and to act in the best interests of the companies and their shareholders.’106 The financial risks posed by the construction of the new plant to shareholders are a result of increased competition from lower-priced renewable energies, increasing carbon prices, and EU energy reforms that could impact state subsidies for coal power.107 This ruling serves as a clear warning to other companies to be careful in disclosing climaterelated risks to their shareholders or risk being liable themselves. 34 Overall, the willingness of domestic courts to hear cases against corporations causing climate-related damage adds pressure for change in industry practices and implicates investment decision-makers. Indeed, as a result of growing pressure from civil society, governments and the judiciary, investment and capital markets have begun to feature climate change as a significant risk factor. Certain enterprises and analysts characterize the systemic nature of climate risk by exploring multiple avenues through which risk or threat of climate change materializes, highlighting ‘litigation risks’ in particular.108 While some might posit that markets will simply adjust themselves to accommodate 101 Adler, U.S. Climate Change Litigation in the Age of Trump: Year One, Sabin Center for Climate Change Law, Columbia Law School, 2018. http://columbiaclimatelaw.com/files/2018/02/Adler-2018-02U.S.-Climate-Change-Litigation-in-the-Age-of-Trump-Year-One.pdf accessed on March 20, 2020. 102 Mooney/Grandoni, New York City sues Shell, ExxonMobil and other oil companies over climate change, The Washington Post, January 10 2018 https://www.washingtonpost.com/news/energy-environment/wp/2018/01/10/new-york-city-sues-shell-exxonmobil-and-other-oil-majors-over-climate-change/? utm_term=.95770433c1d8. 103 County of San Mateo v Chevron Corp and others [2017] No 17 CIV 03222. 104 People of the State of California v BP PLc & Ors [2017] Case no: 3:17-cv-06012-WHA. 105 ClientEarth v Enea [2019] IX GC 1118/18. 106 Paragraph 1a, Ostrołęka C: Energa’s and Enea’s Board Members’ Fiduciary Duties to the Companies and Shareholders, ClientEarth Briefing: September 2018, https://www.documents.clientearth.org/wp-content/uploads/library/2018-09-20-clientearth-briefing-ostroleka-c-energa-and-enea-board-members-fiduciary-duties-to-the-companies-and-shareholders-ce-en.pdf accessed March 20, 2020. 107 World-first climate risk case launched over major coal plant in Poland, ClientEarth: 2018, https:// www.clientearth.org/world-first-climate-risk-case-launched-over-major-coal-plant-in-poland accessed 11 March 2020. 108 Cf Navigating Climate Risk, CERES, (September 2013). Available at: https://static1.squarespace.com/ static/57c0a650197aea879e3a81ef/t/58261ad3e6f2e16e929e1130/1478892253649/Navigating+Climate+Risk+Ceres’+Primer+for+Family+Offices.pdf (Last accessed on 24 April 2018); Climate Change Scenarios – Implications for Strategic Asset Allocation, Mercer (2011). Available at: https://www.ifc.org/wps/wcm/ connect/6b85a6804885569fba64fa6a6515bb18/ClimateChangeSurvey_Report.pdf?MOD=AJPERES (Last accessed on 24 April 2018).

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the new pressures and risk categories, for instance deciding liability for fiduciary duties owed to investments,109 more research is needed to uncover the influence of climate litigation on investment decision-making. Both public and private enterprises and institutional investors among others are placing priority on understanding and responding to climate litigation risks, including through changes in investment decisions.110 For example, the Task Force on Climate related Financial Disclosure,111 set up by the G20, following the Paris Agreement, recommended that corporates should disclose their climate-related financial risk alongside other financial and securities risks. This recommendation has been supported by the EU High Level Expert Group on Sustainable Finance,112 and the UK Green Finance Task Force113 both of which are looking to bring these recommendations into law in the next few years. In addition, shareholder activism, including shareholder resolutions requiring enterprise to reduce greenhouse gas emissions, to divest from fossil fuels, or to switch to clean energy, may be further shaping investment decision-making.114 State actions ranging from the introduction of climate laws, to the promotion of 35 collaborative policies to decelerate investment in obsolete fossil fuels such as coal, suggest States’ growing interest in decoupling economic development from emissions, with more participation from private sector, including investors. Such polices include encouraging investments in renewables, providing subsidies and scaling up funding for innovation in clean energy technologies, and other actions.115 A twenty-fold increase in legislation on climate change is reflective of the fact that the public in many countries supports and indeed drives this trend.116 While some may accuse courts of judicial overreach, the vast increase in climate litigation on all continents suggests that citizens and consumers in many countries expect the judiciary to hold governments, private and public enterprises accountable, in the absence of any other mechanism. Given the emerging prominence of litigation in these capacities, entities seeking to 36 minimize exposure to climate change litigation must adopt several core strategies. By setting ambitious climate-related goals, declaring them publicly, and implementing concrete steps in pursuit of these goals, entities project awareness of the importance of climate change and commitment to addressing the challenge. Transparent and bold displays of climate ambition may deter litigation. Entities, however, assume responsibility for following through on such targets, and litigation can be expected should these entities fall short of their promises. Additionally, clients could pursue divestment of fossil fuel-related and other climate-risk prone assets as a form of precaution to reduce exposure to litigation. Divestment refers to a politically influenced action of wealth 109

Barker et al., 6 Journal of Sustainable Finance and Investment 211. Barker/Winter, 32 Australian Environment Review 62. 111 Task Force on Climate Related Financial Disclosures, TCFD Knowledge Hub: 2019, https://www. fsb-tcfd.org/ accessed March 20, 2020. 112 Final report of the High-Level Expert Group on Sustainable Finance, European Commission: 31 January 2018, https://ec.europa.eu/info/publications/180131-sustainable-finance-report_en accessed March 20, 2020. 113 Greening Finance and Financing Green, Green Finance Institute: 2019, http://greenfinanceinitiative. org/workstreams/green-finance-taskforce/ accessed March 20, 2020. 114 Allen et al., Climate Change and Capital Markets, The Steyer-Taylor Center for Energy Policy and Finance, 2015. https://law.stanford.edu/wp-content/uploads/2015/07/Climate-Change-and-Capital-Markets-FINAL-05-13-2015.pdf accessed on 24 April 2018. 115 Cf UNEP Finance Initiative, Investment Grade Climate Change Policy: Financing the Transition to the Low Carbon Economy, 2011. Available at: http://www.unepfi.org/fileadmin/documents/InvestmentGradeClimateChangePolicy.pdf (Last accessed on 24 April 2018); CERES et al., Briefing Paper submitted to G7 and G20: ‘Governments Urged to Maintain Momentum on Climate Action’, (July 2017). Available at: https://www.ceres.org/sites/default/files/Briefing-Paper-for-G20.pdf (Last accessed on 24 April 2018). 116 Barker, supra (fn. 109). 110

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owners that could include government entities or private financial institutions, in withholding investments for moral reasons, in this case, for the environment-related risks associated with owning such investments.117 By divesting from fossil fuel-related investments, both individuals and groups will not only send a message to their shareholders of their environmental concern, but they will also be protecting their fiduciary duties. Finally, as climate-related risk disclosures are increasingly becoming a key component of many litigations launched against financial institutions and other private corporations, precaution could be taken by groups to be transparent and accurate in disclosing climate-related risk to stakeholders. 37 The trends in climate change litigation outlined in this section, and their implications for international markets more broadly, garnered significant attention during CoP25 in Madrid, including in the Climate Law and Governance Day symposium, where negotiators and senior officials from highly climate vulnerable countries and legal advisors to investors and the climate finance community, debated the implications for investment flows in relation to risk, liability and due diligence.118 Additionally, discussions on the interface of human rights and climate action pointed to the unique innovations of human rights law in protecting the fundamental interests of marginalized and climate vulnerable populations.119 Further attention was afforded to mechanisms for market-based collaborations by international financial institutions to align private sector investments behind the Paris Agreement, as well as legal instruments to compel banks, insurers, and investors’ facilitation of the global energy transition.120 38 Indeed, these topics remain highly relevant in ongoing negotiations to be held in at CoP26 in Glasgow, as States move to finalize outstanding modalities of the Katowice Rulebook, particularly those relating to markets and non-market instruments, finance, and loss and damage. Finally, further attention is needed in understanding the interlinkages between investment and other dimensions of the climate change regime to understand how these synergies may be leveraged in the developing case law.

IV. Innovations in investment law & policy related to clean energy, climate change and sustainable development 39

Further, and equally intriguing, several investment law innovations can be tracked in multilateral, bilateral and national policy in relation to clean energy and climate change. These innovations provide a framework to balance the protection of property rights with the protection of the environment. In recent years, important investment awards have been rendered on projects related to renewable energy and the environment, 117 Ansar/Caldecott/Tilbury, Stranded assets and the fossil fuel divestment campaign: what does divestment mean for the valuation of fossil fuel assets? (Ora.ox.ac.uk: 2013) https://ora.ox.ac.uk/objects/ uuid:f04181bc-8c4f-4cc1-8f01-cafce57975ae/download_file?file_format=pdf&safe_filename=2013.10.08_ SA_in_FF_Div_Campaign.pdf&type_of_work=Report accessed 2 January 2019. 118 CLGD 2019 Proceedings Report (Climate Law and Governance Initiative: 2019) http://www. climatelawgovernance.org/wp-content/uploads/2020/02/CLGD-2019-Proceedings-Report.pdf accessed March 20, 2020; “Legal innovations for Sustainable Investments and Resilient Oceans” (CoP25 Side Event; 2019); “From Policy to Action: how business and investors can reach climate neutrality” (CoP25 Side Event: 2019). 119 Human Rights and Climate Action, CoP25 Side Event: 2019, available at https://seors.unfccc.int/ applications/seors/attachments/get_attachment?code=K9JC4S8GIKKWJNR3EO6RGA80O707I0FP, accessed 20 March 2020. 120 Ensuring Paris Agreement Implementation through limiting finance for fossil fuels, CoP25 Side Event: 2019, available at https://seors.unfccc.int/applications/seors/attachments/get_attachment?code=UDJXHXY1E0TV9RU7N384W7G9DM51P53B, accessed 20 March 2020.

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underscoring the need for markets to reflect emerging concerns and trends. The issue with using investment law as a tool to combat climate change, however, is the way in which climate concerns are packaged in investment treaties and case law. In investment decisions, a measure to combat climate change is rarely dressed as such. Therefore, understanding how climate change protection occurs in the field of investment law means understanding how laws that do not explicitly mention climate change are nevertheless used to combat it.

1. Treaty & policy developments The trends in investment law indicate changes in legal practice in case law, model 40 Bilateral Investment Treaties (BITs) and the way treaties are made. Historically, the main types of clauses that form the meat of investment treaties were limited. Nowadays, several bilateral treaties are being negotiated and entering into force, including chapters and provisions of specific relevance to SDG 7 on access to affordable and clean energy and SDG 13 on bold action on climate change. Many other provisions in these treaties, among a growing collection of ‘next generation’ regional and bilateral trade and investment treaties being crafted this decade, also seek to contribute to various other targets of the 17 SDGs.121 At the same time, because these developments are more recent, there has been very little testing of these norms in treaties from a climate change and sustainability point of view by investment tribunals. However, modern BITs or new Free Trade Agreements (FTAs) very rarely fail to reference norms for climate change prevention. For instance, the Comprehensive Economic and Trade Agreement (CETA) between 41 Canada and the EU provisionally entered into force in 2017.122 It includes a chapter linking trade and sustainable development, in which States ‘recognise that economic development, social development and environmental protection are interdependent and mutually reinforcing components of sustainable development, and reaffirm their commitment to promoting the development of international trade in such a way as to contribute to the objective of sustainable development, for the welfare of present and future generations,’123 and also has related chapters on trade and the environment124 and on trade and labour.125 Several provisions are of direct relevance to clean energy and climate change, particularly in Article 22(1)(3) where States commit to ‘enhance enforcement of their respective labour and environmental law and respect for labour and environmental international agreements; [and to] promote the full use of instruments, such as impact assessment and stakeholder consultations, in the regulation of trade, labour and environmental issues and encourage businesses, civil society organisations and citizens to develop and implement practices that contribute to the achievement of sustainable development goals.’ Moreover, States affirm in Article 22(3)(2) that 121 Cordonier Segger, Athena’s Treaties: Crafting Trade and Investment Agreements for Sustainable Development, Oxford University Press, 2020. 122 For a list of the provisions that entered into force see: Canada Gazette, Vol 151(1), Order Fixing September 21, 2017 as the Day on which the Act Comes into Force, other than Certain Provisions, available at: http://gazette.gc.ca/rp-pr/p2/2017/2017-09-07-x1/html/si-tr47-eng.html. 123 Canada-European Union Comprehensive Economic and Trade and Agreement (CETA) signed October 30, 2016, provisionally entered into force on September 21, 2017, ch. 22, Trade and Sustainable Development, available at http://www.international.gc.ca/trade-commerce/trade-agreements-accordscommerciaux/agr-acc/ceta-aecg/text-texte/22.aspx?lang=eng. 124 Ibid. ch. 24, Trade and Environment, available at http://www.international.gc.ca/trade-commerce/ trade-agreements-accords-commerciaux/agr-acc/ceta-aecg/text-texte/24.aspx?lang=eng. 125 CETA, ch. 23 Trade and Labour, available at http://www.international.gc.ca/trade-commerce/tradeagreements-accords-commerciaux/agr-acc/ceta-aecg/text-texte/23.aspx?lang=eng.

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‘trade should promote sustainable development. Accordingly, each State shall strive to promote trade and economic flows and practices that contribute to enhancing decent work and environmental protection…’ Article 22(3)(3), highlights further the importance of assessing the potential economic, social and environmental impacts of possible actions under the treaty, taking account of stakeholder views. Each State ‘commits to review, monitor and assess the impact of the implementation of this Agreement on sustainable development in its territory in order to identify any need for action,’ also opening the possibility for joint assessments.126 42 Of direct relevance, in Article 24(9)(2), the States commit, consistent with their international obligations to ‘pay special attention to facilitating the removal of obstacles to trade or investment in goods and services of particular relevance for climate change mitigation and in particular trade or investment in renewable energy goods and related services.’ In addition, in Article 24(12)(1), the States prioritize ‘trade-related aspects of the current and future international climate change regime, as well as domestic climate policies and programmes relating to mitigation and adaptation, including issues relating to carbon markets, ways to address adverse effects of trade on climate, as well as means to promote energy efficiency and the development and deployment of low-carbon and other climate-friendly technologies; … trade and investment in environmental goods and services, including environmental and green technologies and practices; renewable energy’ and also ‘promotion of life-cycle management of goods, including carbon accounting and end-of-life management…’ They also undertake, at Article 24(10)(2)(a), ‘in a manner consistent with their international obligations to: (a) encourage trade in forest products from sustainably managed forests and harvested in accordance with the law of the country of harvest; (b) exchange information, and if appropriate, cooperate on initiatives to promote sustainable forest management, including initiatives designed to combat illegal logging and related trade…’ an innovation that if implemented to incentivize investment and trade, could deliver co-benefits for climate change.127 They seek ‘improved understanding of the effects of economic activity and market forces on the environment; and exchange of views on the relationship between multilateral environmental agreements and international trade rules.’ Taken together, these commitments suggest CETA’s potential to support the implementation of Article 2(1)(c) of the Paris Agreement on climate change under the UNFCCC and related provisions,128 as well as other accords that seek to promote climate action and sustainable development of renewable energy.129 To encourage implementation, at Article 24(13) States commit to take into account the activities of relevant multilateral environmental organisations, and establish a mechanism whereby the new Committee on Trade and Sustainable Development (CTSD) serves as a focal institution within the organisation for discussion, cooperation and implementation of these provisions. 126

See Gehring/Stephenson/Cordonier Segger, Journal of World Investment and Trade 17, 155. For further discussion see Cordonier Segger/Gehring/Wardell, REDD+ Instruments, International Investment Rules and Sustainable Landscapes in: Voight, Research Handbook on REDD+ and International Law. 128 See Cordonier Segger, Cambridge International Law Journal 5(2), 202; Cordonier Segger, Canadian International Lawyer 11(2), 124. 129 Although CETA does not explicitly mention reducing fossil fuel subsidies in the same way as, for instance, the EU-Singapore FTA, ch. 12, sec. C, & annex 12-A at art. 13.11(3). See Gehring/Cordonier Segger et al., ‘Climate Change and Sustainable Energy Measures in Regional Trade Agreements (RTAs): An Overview’ (2013) International Centre for Trade and Sustainable Development, Issue Paper No 3, available at https://www.ictsd.org/sites/default/files/downloads/2013/08/climate-change-and-sustainableenergy-measures-in-regional-trade-agreements-rtas.pdf. See also Green Invest, ‘Green Foreign Direct Investment in Developing Countries’ (2017) UN Environment Programme, available at http://ccsi. columbia.edu/files/2017/10/Green_Foreign_Direct_Investment_in_Developing_Countries.pdf. 127

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In Chapter 22, the States also emphasize that the rights and obligations outlined in the 43 labour and environmental chapters are to be taken into account by the States as part of an integrated approach on trade and sustainable development.130 This guides interpretation, for instance in the context of future investment disputes.131 The Vienna Convention requires that treaties are to be interpreted in light of their object and purpose,132 and the States’ objectives for the CETA encompass the promotion of sustainable development. In the treaty, States also reinforce the need for transparency,133 and commit to an ongoing dialogue on trade and sustainable development,134 creating a CTSD which will oversee the implementation of the environment and labour chapters.135 The CTSD can refer implementation to a Panel of Experts established to examine any concerns and provide recommendations for their resolution. If the final report of the Panel of Experts determines that a State has not conformed with its obligations, the States shall engage in discussions and shall endeavour, within three months of the delivery of the final report, to identify an appropriate measure or, if appropriate, to decide upon a mutually satisfactory action plan. Such provisions suggest that the approach of Europe and Canada has evolved from earlier trade and investment plus environment focus, into a more nuanced focus on cooperation and integrated commitment to incentivize trade and investment that will support sustainable development. This sends important signals to investors and other concerned parties that the treaty seeks to encourage climate-related trade and investment. Another example is the investment chapter of the Trans-Pacific Partnership Agree- 44 ment,136 which contains a clause on ‘Investment and Environmental, Health and other Regulatory Objectives’. This is a carve out which permits a State to adopt, maintain, or enforce any measure that it considers appropriate to ensure that ‘investment activity in its territory is undertaken in a manner sensitive to environmental… objectives’.137 This clause has gained heightened importance because it has been incorporated into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) that entered into force on December 30, 2018.138 The CPTPP is a free trade agreement between Canada and 10 other countries in the Asia-Pacific region: Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.139 The preamble of the CPTPP reaffirms the importance of environmental protection and sustainable development. However, the environmental objectives of the treaty are more specifically incorporated through Chapter 20 of the TPP which focuses on promoting investment in renewable energy and acknowledges that ‘transition to a low emissions economy requires collective action’ which should reflect domestic circumstances and capabilities of each State Party.140 130

CETA, supra (fn. 123), art. 22.1(2). Ibid. art. 29(17). 132 Vienna Convention on the Law of Treaties, 1155 U.N.T.S. 331, 8 I.L.M. 679, entered into force Jan. 27, 1980, 1. See Cordonier Segger, Canadian Journal of Comparative and Contemporary Law 3(1), p. 159. 133 CETA, supra (fn. 123). art. 22(2). 134 Ibid. art. 22(3). 135 CETA, supra (fn. 123), art. 26(2)(1)(g). 136 Trans-Pacific Partnership (TPP), signed 4 February 2016, ch. 9. 137 TPP, supra (fn. 136), ch. 9, art. 9(16). 138 Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), entered into force on December 30, 2018, available at https://www.dfat.gov.au/sites/default/files/tpp-11-treaty-text.pdf. 139 Ibid. 140 CPTPP, supra (f. 138), ch. 20, art. 20(15). See TPP, supra (fn. 136), ch. 20, Article 20(15), para. 2: ‘Areas of cooperation may include, but are not limited to: energy efficiency; development of cost-effective, low emissions technologies and alternative, clean and renewable energy sources; sustainable transport and sustainable urban infrastructure development; addressing deforestation and forest degradation; emissions monitoring; market and nonmarket mechanisms; low emissions, resilient development and sharing of information and experiences in addressing this issue.’ 131

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Further, through Article 20(4), the CPTPP emphasises that each State is committed to implement all multilateral environmental agreements to which it is a party.141 Consequently, there a clear commitment to fulfil the requirements of the Paris Agreement and respect all duties regarding action against climate change. This is bolstered by the States’ recognition in Article 20(3), that it is ‘inappropriate to encourage trade or investment by weakening or reducing the protection afforded in their respective environmental laws’. The States have resultantly agreed that they shall not weaken or reduce protection in their domestic environmental laws in order to encourage foreign investment.142 The impact this has, is that for the purpose of determining what an ‘expropriation’ is under the treaty, ‘[n] on-discriminatory regulatory actions by a State that are designed and applied to protect legitimate public welfare objectives, such as… the environment, do not constitute indirect expropriations, except in rare circumstances’.143 Expropriation clauses in the new BITs are increasingly being drafted in such a way that measures to ‘protect legitimate public welfare objectives including… environmental concerns, do not constitute expropriation’.144 46 Lastly, Article 9(10), paragraph 3(d)(iii) of the CPTPP also recognizes that States Parties have the power to impose conditions that foreign investments must fulfil, which are ‘related to the conservation of living or non-living exhaustible natural resources.’145 These conditions are permitted so long as they ‘are not applied in an arbitrary or unjustifiable manner, or do not constitute a disguised restriction on international trade or investment’.146 This provision could pave the way for States Parties to provide incentives for investments in renewable energy as a way to conserve the exhaustible natural resources and, consequently, combat climate change. 47 India has also signed various BITs in recent years.147 These new BITs are patterned on a model BIT that India unveiled in January 2016,148 comprising of an indicative 45

141 CPTPP, supra (fn. 138), ch. 20, art. 20(4), para. 1: ‘The Parties recognise that multilateral environmental agreements to which they are party play an important role, globally and domestically, in protecting the environment and that their respective implementation of these agreements is critical to achieving the environmental objectives of these agreements. Accordingly, each Party affirms its commitment to implement the multilateral environmental agreements to which it is a party.’ 142 CPTPP, supra (f. 139), ch. 20, art. 20(3), para. 6: ‘Without prejudice to paragraph 2, the Parties recognise that it is inappropriate to encourage trade or investment by weakening or reducing the protection afforded in their respective environmental laws. Accordingly, a Party shall not waive or otherwise derogate from, or offer to waive or otherwise derogate from, its environmental laws in a manner that weakens or reduces the protection afforded in those laws in order to encourage trade or investment between the Parties.’ 143 CPTPP, supra (fn. 138), ch. 9, Annex 9-B, para. 3(b), available at https://ustr.gov/sites/default/files/ TPP-Final-Text-Investment.pdf. 144 India-Lithuania Bilateral Investment Treaty (2011), entered into force 1 December, 2011 annex, para. 3. See also, CPTPP, supra (fn. 138), ch. 9, annex 9-B, para. 3(b), available at https://ustr.gov/sites/ default/files/TPP-Final-Text-Investment.pdf; Brazil-India Bilateral Investment Treaty (2020), signed on 25 January, 2020, art. 6(4); Agreement Between the Government of Canada and the Government of the People’s Republic of China for the Promotion and Reciprocal Protection of Investments (Canada-China Bilateral Investment Treaty), entered into force 1 October, 2014, annex B(10), para. 3; Australia-Peru Free Trade Agreement (2018), entered into force 11 February, 2018, annex 10(A), para. 3(b); ASEAN-Hong Kong Investment Agreement (2017), entered into force 17 June 2019, annex 2, para. 4. 145 CPTPP, supra (fn. 138), ch. 9, art. 9(10), para. 3(d)(iii), available at https://ustr.gov/sites/default/ files/TPP-Final-Text-Investment.pdf. 146 Ibid. 147 Brazil-India BIT, supra (fn. 144); India-Kyrgyzstan BIT (2019), signed on 14 June 2019; BelarusIndia BIT (2018), signed on 24 September, 2018. The only BITs that remain in force from the 2010s with India as a Party are the India-UAE BIT (2013), entered into force on 21 August, 2014; India-Lithuania BIT (2011), entered into force 1 December, 2011; and India-Latvia BIT (2010), entered into force 27 November, 2010. For details see https://investmentpolicy.unctad.org/international-investment-agreements/countries/96/india. 148 Model Text for the Indian Bilateral Investment Treaty, India, January 2016.

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document of the exact obligations India is willing to agree to. The preamble of the model BIT seeks to ‘align the objectives of investment with sustainable development and inclusive growth of the Parties’. Of particular relevance to clean energy and climate change, is Article 8(1) which seeks to ‘enhance the contribution of Investments to inclusive growth and sustainable development of the Host State’. Further, a number of BITs based on this model BIT have drafted fair and equitable 48 treatment clauses that can have a powerful impact in supporting green investments in clean energy and in the fight against climate change.149 For example, a footnote in the Indian model BIT notes that the requirement of ‘like circumstances’ implies a recognition that the host State might have legitimate reasons for distinguishing between investments including, but not limited to the actual and potential impact of the investment on third parties, the local community, or the environment. The Brazil-India BIT, signed on 25 January 2020 epitomizes the use of investment treaty concepts such as fair and equitable treatment (FET) to protect measures intended to combat climate change. Article 5 of the treaty recognizes that equal treatment ‘in like circumstances’ depends on the ‘totality of the circumstances, including whether the relevant treatment distinguishes between investors or investments on the basis of legitimate public welfare or regulatory objectives.’150 Such clauses permit States to recognize that energy that comes from a renewable source is not in like circumstances with energy that is not from a renewable source. Consequently, States are given a leeway to adopt ‘discriminatory’ policies that are favourable to clean energy and renewable resources even where they discriminate against investors in non-renewable energy. Another way investment treaties are being drafted to protect measures taken to 49 combat climate change is by including these measures under the garb of ‘general exceptions’. For instance, Article 9(8) in the Investment Chapter of the Australia-China FTA (2015) states that the FTA does not prevent a State from ‘adopting or enforcing measures… includ[ing] environmental measures relating to the conservation of living or non-living exhaustible natural resources.’151 This is of significance to the energy sector as it precludes investors from bringing claims against the State for measures intended to conserve fossil fuel resources by promoting alternative green technologies. Further, Article 22 of the Brazil-India BIT lists ‘Provisions on Investment and Environment, Labor Affairs and Health.’ It goes on to state that ‘nothing in this Treaty shall be construed to prevent a State from adopting, maintaining or enforcing any measure it deems appropriate to ensure that investment activity in its territory is undertaken in a manner according to labour, environmental and health law of that State, provided that this measure is not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction.’152 This clause, which is found in 149

India’s Model BIT, art. 4; Brazil-India BIT, supra (fn. 144), art. 5(2). Brazil-India BIT, supra (fn. 144), art. 5(2). 151 Australia-China FTA (2015), entered into force 20 December 2015. See art 9(8): ‘GENERAL EXCEPTIONS 1. For the purposes of this Chapter and subject to the requirement that such measures are not applied in a manner which would constitute arbitrary or unjustifiable discrimination between investments or between investors, or a disguised restriction on international trade or investment, nothing in this Agreement shall be construed to prevent a Party from adopting or enforcing measures: (a) necessary to protect human, animal or plant life or health; (b) necessary to ensure compliance with laws and regulations that are not inconsistent with this Agreement; (c) imposed for the protection of national treasures of artistic, historic or archaeological value; or – 90 – (d) relating to the conservation of living or non-living exhaustible natural resources. 2. The Parties understand that the measures referred to in subparagraph 1(a) include environmental measures to protect human, animal or plant life or health, and that the measures referred to in subparagraph 1(d) include environmental measures relating to the conservation of living or non-living exhaustible natural resources.’ 152 Brazil-India BIT, supra (fn. 144), art. 22(1). 150

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similar form in other BITs,153 including the Canada-China BIT (2012),154 indicates that States appear to be moving toward achieving investment protection through environmental norms and environmental protection through investment norms. For instance, States can incentivize specific types of investment like green investment under this clause because they are in effect protecting the environment when protecting specific types of investment like green investment. 50 In essence, rather than staying silent or ignoring challenges, treaty regimes increasingly and explicitly encourage and promote trade and investment for more sustainable energy development and are expected to respond to global concerns on climate change. Treaty regimes are doing this by recognizing that first, energy which comes from a renewable resource is not in ‘like circumstances’ with energy that does not. Consequently, measures intended to incentivize clean energy are not considered discriminatory against fossil fuel industries. Secondly, new BITs incorporate clauses which prohibit States Parties from lowering their environmental standards to incentivize investments. Thirdly, expropriation clauses in new treaty regimes provide explicit carve outs for measures intended to protect the environment. As a result, any measure taken to support green investment is increasingly not being considered as an ‘expropriation’. Lastly, certain modern treaties incorporate general exception clauses act as a carve out for ‘environmental measures’, which provide States with a justification for implementing measures in favour of green technologies to conserve exhaustible resources.

2. Investment treaty disputes The case law of international investment arbitrations has also significantly changed in the last decade with a trend toward the prioritisation of measures to combat climate change over the protection of investments. However, climate change protection in these decisions is often not packaged as such but is distilled from the protection of ‘measures’ taken to protect the environment and the general approach of tribunals adopting principles of international environmental law like the precautionary approach or the polluter pays principle.155 52 The trends in investment law decisions on matters pertaining to climate change, clean energy and sustainable development are so difficult to distil because of the inherent nature of international investment law and the lack of binding value of precedent. However, the portion of investment disputes with relevance for clean energy, climate change and sustainable development went from less than 1 % prior to this decade to over 20 % of the cases.156 The problem is that international investment law awards in the 2010s form a body of case law that is a mosaic – fractured with many patterns and 51

153

Australia-Hong Kong BIT (2019), entered into force 17 January 2020, art. 15. Canada-China BIT, supra (fn. 144), art. 33, para. 2: ‘Provided that such measures are not applied in an arbitrary or unjustifiable manner, or do not constitute a disguised restriction on international trade or investment, nothing in this Agreement shall be construed to prevent a Contracting Party from adopting or maintaining measures, including environmental measures…’ 155 The precautionary approach and the polluter pays principle in judicial decisions are of relevance to combat climate change because they provide a theoretical basis to reduce the amount of compensation granted to an investor when a measure imposed by a State on the investor, which is intended to combat climate change is held to be in breach of the State’s obligations under international investment law. 156 Viñuales, Foreign Investment and the Environment in International Law: The Current State of Play, in: Miles, Research Handbook on Environment and Investment Law, ch. 2, Forthcoming, available at http://www.ceenrg.landecon.cam.ac.uk/, accessed 12 March 2020. See generally, Cordonier Segger/Weeramantry (eds.), Sustainable Development Principles in the Decisions of International Courts and Tribunals, Routledge 2017, ch. 23–25. 154

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contradictions within its framework. Some of the decisions are unwilling to consider climate change or other environmental issues. Other cases have been very directly concerned with them. Take for instance, the view taken in Clayton/Bilcon v. Canada.157 This was a case 53 which involved the rejection of a project to develop and operate a quarry in Nova Scotia. After a preliminary approval, a panel was nominated to conduct an environmental impact assessment. In its final report, the assessment recommended that the project be rejected because it had a significant and adverse environmental effect on the ‘community core values’. The tribunal favoured the investor in this case and awarded compensation despite the immense loss of green cover that would have arisen from allowing the project. In its decision, the majority spoke rather contradictorily about how important it is to protect the environment against climate change but then went on to hold that there was a breach of the investment treaty despite the measure in question being used to prevent climate change. The tribunal rationalized that there could not be a decision that blocks an investment for environmental protection alone. The measure against climate change was seen as a mask for a hidden agenda (indirect expropriation) which was prohibited under the investment treaty.158 Such decisions have grave impacts on the fight against climate change, as can be 54 clearly seen in the decision of Unglaube v. Costa Rica.159 The State in this case was attempting to acquire a 75m strip of the investor’s property to develop a National Park. The developed park would add significantly to the green cover and biodiversity in the State. However, the tribunal decided the case on the basis of the earlier Santa Elena decision,160 quoting that: ‘Expropriatory environmental measures – no matter how laudable and beneficial to society as a whole – are, in this respect, similar to any other expropriatory measures that a state may take in order to implement its policies.’161 Consequently, a measure taken by a government to protect its green cover was not seen as being in consonance with international investment law. The tribunal viewed the measure adopted merely as a national measure governed by international law that affected the investment. It rationalized that a State cannot invoke its own national law as a justification to violate an international obligation162 – an obligation that arose through the treaty. It is very rare to find investment decisions that say environmental treaties trump 55 investment protection, although you do find the same when the cases are pleaded before human rights tribunals.163 One such example of an investment case pleaded before a human rights tribunal is the Yukos decision.164 This decision recognized that 157 William Richard Clayton, Douglas Clayton, Daniel Clayton and Bilcon of Delaware Inc. v. Canada, UNCITRAL, PCA Case No. 2009–04, Award on Jurisdiction and Liability of 17 March 2015. 158 Viñuales, The Environmental Regulation of Foreign Investment Schemes under International Law, in: Dupuy/Viñuales, Harnessing Foreign Investment to Promote Environmental Protection: Incentives and Safeguards, Cambridge University Press, 2013. 159 Marion Unglaube v. Costa Rica and Reinhard Unglaube v. Costa Rica, ICSID Cases nos ARB/08/1 and ARB/09/20, para. 216. 160 Compañía de Desarrollo de Santa Elena, S.A. v. Republic of Costa Rica, ICSID Case No. ARB/96/1, Award (Feb. 17, 2000). 161 Marion Unglaube v. Costa Rica and Reinhard Unglaube v. Costa Rica, para. 214. Unglaube v. Costa Rica, Award, ICSID Cases nos ARB/08/1 and ARB/09/20. 162 Vienna Convention on the Law of Treaties, art. 27. 163 Lagos del Campo decision, Inter-American Court of Human Rights, para. 141., available at https:// www.corteidh.or.cr/docs/casos/articulos/seriec_340_esp.pdf. 164 OAO Neftyanaya Kompaniya Yukos v Russia App 14902/04 (ECtHR, 20 September 2011) http:// hudoc.echr.coe.int/sites/eng/pages/search.aspx?i=001-106308 accessed 22 December 2014 (Yukos, Merits).

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it is only natural when a State enters a treaty that it will do something to achieve the objects of the treaty. International law norms exist that entitle a State to adopt a measure such as the precautionary approach or polluter pays principle.165 The implication this decision has is that a State can implement a measure intended to combat climate change even if that measure affects a foreign investment as long as the measure is linked to or at the very least induced by the existence of an international obligation to combat climate change such as those arising from the Paris Agreement. 56 In more recent investment decisions of relevance to climate change, traditional concepts of investment law are being increasingly used to justify measures to combat climate change which might be at loggerheads with foreign investments. One way this occurs can be seen in Cortec Mining v. Kenya.166 The treaty in this case had a clause stating that the ‘protected object’ would only be an investment made in accordance with domestic law. This was a case of mining illegally in a protected area for minerals that were extremely important raw materials for developing solar cells. However, the government recognized the illegal nature of the mines and halted the activities of the foreign investor. The government successfully argued that the investment was not made in accordance with national law. Consequently, it used the framework of investment law (definition of a ‘protected investment’) to dress its environmental claim that its measures shutting down the mines were meant to prevent deforestation, protect the surrounding environment, and combat climate change. 57 This past decade has seen the boundaries of investment law being stretched to better accommodate environmental law. Actions to prevent climate change are being justified using the framework of investment law. Investment treaty clauses requiring compliance with domestic law are no longer limited to cases of corruption or violation of ‘international public policy’. It has now been widely interpreted to take into account environmental norms, such as public participation and environmental impact assessments.167 This is significant to combat climate change because it means investors will not have to take into account the displacement their investments might cause to the local public by their exploitation of resources.168 These decisions also have significant implications where an investor brings a claim for breach of investment treaty due to an unfavourable change in the law. In cases where the investment was initially made in accordance with domestic law but later became illegal,169 such decisions mean that the investor should take into account all that it has knowledge will likely happen in terms of legislative changes.

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Cordonier Segger/Weeramantry, supra (fn. 156). Cortec Mining Kenya Limited, Cortec (Pty) Limited and Stirling Capital Limited v. Republic of Kenya, (ICSID Case No. ARB/15/29). 167 Mamidoil Jetoil Greek Petroleum Products Societe S.A. v. Republic of Albania, ICSID Case No. ARB/ 11/24; Cortec Mining Kenya Limited, Cortec (Pty) Limited and Stirling Capital Limited v. Republic of Kenya, (ICSID Case No. ARB/15/29). 168 This includes displacement due to desertification, drought, or extreme temperatures that might arise due to certain kinds of unsustainable investments. Cordonier Segger/Weeramantry, supra (fn. 156) p. 111. 169 Plama Consortium Limited v. Republic of Bulgaria, ICSID Case No. ARB/03/24: The investor bought a former government factory that had a massive amount of contamination in the land. According to the domestic law, it was the owner even if he was not the polluter who had to pay for remediation. When the land was bought, a due diligence about the situation and the exposure of the targeted object was conducted. Thereafter, the existing regime on contaminated land suddenly changed. The question was: To what extent should the investor have known the law would change? The tribunal held that it should have known because the possibility of changing the law was being discussed in Congress when the due diligence was conducted. 166

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This past decade has also seen decisions that have expanded the understanding of the FET standard when applying it to the renewable energy sector. When an investor argues that a State’s change of the law was a violation of FET, the position is that if the change would be expectable for any diligent investor then the investor cannot be given investment protection. This is a determination of what is reasonable in terms of the expectation – the ‘legitimacy’ of the expectation. However, of relevance to measures taken to combat climate change, is the decision in Parkerings-Compagniet AS v. Republic of Lithuania.170 It was held that if two types of activities have two different carbon footprints, then they are not in ‘like circumstances’ for breach of FET.171 Climate change protection is increasingly being packaged so that investment arbitrations are being used to enforce the environmental obligations of host States. For instance, under an array of arbitrations on renewable energy, classical investment principles are being used to argue that host States are not doing enough to achieve their green obligations. Several interesting investor-state awards are also being issued, including an important award in relation to European renewable energy disputes, as well as awards related to counter-claims based on human rights violations and environmental damage. Moreover, among the still pending cases, in the two disputes the investors are challenging the governments’ decision to introduce restrictions on offshore oil and gas activity.172 Investment disputes relating to European renewable energy continue to emerge, with new claims also becoming public. In these cases, claimants had invested significantly in renewable energy programs which would arguably further global SDGs related to climate change mitigation (SDG 13) and clean, affordable energy (SDG 7). When these programs were substantially changed or administered in a manner contrary to treaty standards by governments that had committed to incentivize renewables, the investors then pursued their economic rights to enforce standards of conduct and government behaviour. To date there have been at least 40 cases brought against Spain in the wave of litigation by solar power and other eco-investors,173 and with many cases of important

170

Parkerings-Compagniet AS v. Lithuania, ICSID Case No. ARB/05/8, Award (11 September 2007). Parkerings-Compagniet AS v. Lithuania, ICSID Case No. ARB/05/8, Award (11 September 2007). 172 Rockhopper Exploration Plc, Rockhopper Italia S.p.A. and Rockhopper Mediterranean Ltd v. Italian Republic (ICSID Case No. ARB/17/14); Lone Pine Resources Inc. v. The Government of Canada, ICSID Case No. UNCT/15/2. 173 OperaFund Eco-Invest SICAV PLC and Schwab Holding AG v. Kingdom of Spain (ICSID Case No. ARB/15/36; EDF ENERGIES NOUVELLES (France) v. Kingdom of Spain; FREIF Eurowind Holdings Ltd v. Kingdom of Spain SCC, case No. 2017/060; Green Power K/S Y Obton A/S (Denmark) v. Kingdom of Spain, SCC, Case No. V2016/135; Greentech Energy System A/S, Foresight Luxembourg Solar 1 S.A.R.L., Foresight Luxembourg Solar 2 S.A.R.L., GWM Renewable Energy l S.P.A, GWM Renewable Energy ll S.P.A v. Kingdom of Spain; The PV Investors v. Spain, UNCITRAL; Charanne (the Netherlands) and Construction Investments (Luxembourg) v. Spain, SCC; Isolux Infrastructure Netherlands B.V. v. Spain, SCC; Eiser Infrastructure Limited and Energia Solar Luxembourg S.à.r.l. v. Spain, ICSID Case No. ARB/13/36; CSP Equity Investment S.à.r.l. v. Spain, SCC; RREEF Infrastructure (G.P.) Limited and RREEF Pan-European Infrastructure Two Lux S.à.r.l. v. Spain, ICSID Case No. ARB/13/30; Antin Infrastructure Services Luxembourg S.à.r.l. and Antin Energia Termosolar B.V. v. Spain, ICSID Case No. ARB/13/31; Masdar Solar & Wind Cooperatief UA v. Spain ICSID Case No. ABR/14/01. 171

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relevance for the security of renewable energy investments.174 Italy175 and the Czech Republic176 have each had at least seven disputes brought against them. Non-legal NGO commentators suggest that such cases, were they to be resolved for the full amounts claimed, would be worth over USD 9.5 billion.177 As such, these disputes are a warning for states looking to encourage foreign investment in their renewable energy sectors.178 The cases suggest that even in the absence of specific representations by the government, an investor may rely on the FET standard when subjected to fundamental changes in the state’s regulatory regime. Thus, governments ought to be careful not to alter their regulatory landscapes in the renewable energy sectors too drastically so as to unreasonably withdraw promised incentives, or fail to provide investors with the time necessary to meet new standards.179 Further, investors may even coax States into upholding their commitments under environment treaties by successfully arguing that a breach of a treaty within the framework of international environmental law such as the Kyoto Protocol would amount to a breach of FET because the State is expected to abide by its treaty obligations. 62 In the decisions in Charanne180 and Isolux181 in 2016, Spain was successful in defending its measures against the claims made by investors. These were followed 174 NextEra Energy Global Holdings B.V. and NextEra Energy Spain Holdings B.V. v. Spain, ICSID Case No. ABR/14/11; InfraRed Environmental Infrastructure GP ltd. et al. v. Spain, ICSID Case No. ABR/14/12; RENERGY S.à.r.l. v. Spain, ICSID Case No. ABR/14/18; Stadtwerke München GmbH, RWE Innogy GmbH et al. v. Spain, ICSID Case No. ARB/15/1; RWE Innogy GmbH and RWE Innogy Aersa S.A.U. v. Spain, ICSID Case No. ARB/14/34; STEAG GmbH v. Spain, ICSID Case No. ABR/15/4; 9REN Holding S.a.r.l v. Spain, ICSID Case No. ARB/15/15; BayWa r.e. Renewable Energy GmbH and BayWa r.e. Asset Holding GmbH v. Spain, ICSID Case No. ARB/15/16; Cube Infrastructure Fund SICAV and others v. Spain ICSID Case No. ARB/15/20; Matthias Kruck and others v. Spain, ICSID Case No. ARB/15/23; KS Invest GmbH and TLS Invest GmbH v. Spain, ICSID Case No. ARB/15/25; JGC Corporation v. Spain ICSID Case No. ARB/15/27; Cavalum SGPS, S.A. v. Spain ICSID Case No. ARB/15/34; E.ON SE, E.ON Finanzanlagen GmbH and E.ON Iberia Holding GmbH. v. Spain, ICSID Case No. ARB/15/35; SolEs Badajoz GmbH v. Spain, ICSID Case No. ARB/15/38; Hydro Energy 1 S.à r.l. and Hydroxana Sweden AB v. Spain, ICSID Case No. ARB/15/42; Watkins Holdings S.à r.l. and others v. Spain, ICSID Case No. ARB/15/44; Landesbank Baden-Württemberg and others v. Spain, ICSID Case No. ARB/15/45; Eurus Energy Holdings Corporation and Eurus Energy Europe B.V. v. Spain, ICSID Case No. ARB/16/4; Alten Renewable Energy Developments BV v. Spain, SCC; Sun-Flower Olmeda GmbH & Co KG and others v. Spain, ICSID Case No. ARB/16/17; Infracapital F1 S.à r.l. and Infracapital Solar B.V. v. Spain, ICSID Case No. ARB/16/ 18; Sevilla Beheer B.V. and others v. Spain ICSID Case No. ARB/16/27; Portigon AG v. Kingdom of Spain, ICSID Case No. ARB/17/15; Novenergia v. Spain, SCC; DCM Energy GmbH & Co. Solar 1 KG and others v. Kingdom of Spain, ICSID Case No. ARB/17/41. 175 VC Holding II S.a.r.l. and others v. Italy, ICSID Case No. ARB/16/39; ESPF Beteilingungs GmbH, ESPF Nr. 2 Austria Beteilingungs GmbH, and InfraClass Energie 5 GmbH & Co. KG v. Italy, ICSID Case No. ARB/16/5; Eskosol S.p.A. in liquidazione v. Italy, ICSID Case No. ARB/15/50; Belenergia S.A. v. Italy, ICSID Case No. ARB/15/40; Silver Ridge power BV v. Italy, ICSID Case No. ARB/15/37; Blusun SA, Jean-Pierre Lecorcier and Nichael Stein v. Italy, ICSID Case No. ARB/14/03; Greentech Energy Systems and Novenergia v. Italy, SCC 2015. 176 Antaris Solar and Dr. Michael Göde v. Czech Republic, PCA; Jürgen Wirtgen, Stefan Wirtgen, Gisela Wirtgen and JSW Solar (zwei) GmbH & Co. KG v. Czech Republic, PCA Case No. 2014-03; Natland Investment Group NV, Natland Group Limited, G.I.H.G. Limited, and Radiance Energy Holding S.A.R.L. v. Czech Republic; Voltaic Network GmbH v. Czech Republic, PCA; ICW Europe Investments Limited v. Czech Republic, PCA; Photovoltaik Knopf Betriebs-GmbH v. Czech Republic, PCA; WA InvestmentsEuropa Nova Limited v. Czech Republic, PCA. 177 Peterson, Investment Arbitration Report, February 7. 2018. 178 Power/Baker, Energy Arbitrations (2018), The European Arbitration Review 2018 (October 2017), available at https://globalarbitrationreview.com/insight/the-european-arbitration-review-2018/1148943/ energy-arbitrations. 179 See online http://www.wfw.com/wp-content/uploads/2017/06/Investor-succeeds-in-ECT-renewableenergy-arbitration-Eiser-v-Spain.pdf. 180 Charanne B.V. and Construction Investments S.a.r.l. v. Spain (SCC Case No. 062/2012). 181 Isolux Infrastructure Netherlands B.V. v. Kingdom of Spain (SCC Case No. 2013/153).

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shortly by the Eiser decision in 2017, however, in which the claimant was successful and was awarded USD 140 million in lost profits from their investment in a Concentrated Solar Power (CSP) project.182 The tribunal considered that the continuous regulatory changes approved by the Spanish Government, including the sudden cuts to the Feed-in Tariff (FIT) regime for the photovoltaic sector introduced by the Spalma-Incentivi Decree, were in violation of Article 10(1) of the Energy Charter Treaty (ECT).183 The Tribunal noted that although the ECT did not grant Eiser the right to expect a fixed legal regime, they did have legitimate expectation that regulatory measures would not destroy the value of their investment. The evidence showed that Spain had changed its regulatory regime in 2013/2014 in a drastic fashion, by adopting and implementing an entirely new regulatory approach, ‘applying it to existing investments in a manner that washed away the financial underpinnings of the claimants’ investments.’184 The new regime was based on different assumptions, and utilized a new and untested regulatory approach, all intended to significantly reduce subsidies to existing plants.185 In Mobil,186 the issue in dispute was similar in so far as Venezuela, the Respondent 63 Government had adopted an entirely new regulatory approach. The claimant had made investments in two extra-heavy crude oil projects located in the Venezuelan region of the Orinoco Oil Belt, under profit sharing agreements concluded with the Government. Prior to investing, in 1991, Venezuela introduced incentives such as a reduction in the tax rate and the rate of applicable royalties for this sector. However, in 2006, Venezuela imposed an extraction tax on all liquid hydrocarbons extracted from the ground. Royalty payments were also to be credited to the liability for extraction tax.187 Thereafter, claims arose out of Venezuela’s nationalization of the two oil projects in which the claimants had interests and subsequent disagreements concerning the amount of compensation owed to the investor.188 Of relevance here is the fact that the tribunal rejected the pre-expropriation FET claim brought due to the change in taxation by stating that the BIT’s FET provision did not protect foreign investors against tax measures. On the issue of compensation, the tribunal found that the nationalization was lawful but imposed a ‘just compensation’ of about USD 1.6 billion on Venezuela. The compensation amount is much closer to the valuations put forward by Venezuela in the arbitration, than the USD 16.6 billion requested by the Claimants.189 The Award was recognized in the Southern District of New York through an ex parte procedure, although in November of 2017 the order recognizing the award in New York was challenged and vacated.190

182 Eiser Infrastructure Limited and Energia Solar Luxembourg v Spain (Award 4 May 2017, Annulment Application registered 28 July 2017). 183 Eiser Infastructure Limited and Energia Solar Luxembourg S.A.R.L v. Kingdom of Spain, Award, ICSID Case No. ARB/13/36, April 26, 2017. 184 Eiser Infastructure Limited and Energia Solar Luxembourg S.A.R.L v. Kingdom of Spain, Award, ICSID Case No. ARB/13/36, April 26, 2017, para. 389. 185 Ibid. 389–393. 186 Mobil Cerro Negro Holding, Ltd., Mobil Cerro Negro, Ltd., Mobil Corporation and others v. Bolivarian Republic of Venezuela (ICSID Case No. ARB/07/27). 187 Mobil Cerro Negro Holding, Ltd., Mobil Cerro Negro, Ltd., Mobil Corporation and others v. Bolivarian Republic of Venezuela (ICSID Case No. ARB/07/27), Award dated 9 October 2014, para. 94–97. 188 After having increased their applicable royalty rate and income tax. 189 See Smith Freehills, ‘Exxon Mobil Is Awarded US$1.6 Billion in ICSID Claim against Venezuela – to Be Set off against Award in Parallel Contractual Arbitration’, (16 October 2014) .https://hsfnotes.com/ arbitration/2014/10/16/exxon-mobil-is-awarded-us1-6-billion-in-icsid-claim-against-venezuela-to-be-setoff-against-award-in-parallel-contractual-arbitration/ accessed 26 March 2020. 190 Judge Kaplan relied on two second circuits decisions that found that the Foreign Sovereign Immunities Act did not permit the use of summary ex parte enforcement procedures, and that the Petitioners were, instead, required to file a plenary action to enforce their ICSID award; see Mobil Cerro

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In another case, a decision was rendered for some of the claims against Czech Republic relating to its solar program. In Jürgen Wirtgen, Stefan Wirtgen, Gisela Wirtgen and JSW Solar (zwei) GmbH & Co. KG v. Czech Republic, the Czech Republic successfully defended its measures against further claims, despite arbitrator Gary Born’s strong dissent.191 In an attempt to encourage the production of electricity from renewable sources of energy, Czech Republic issued a Support Scheme providing incentives of a guaranteed FIT, originally for 15 and later 20 years and tax incentives. According to the claimants, they made investments in solar photovoltaic plants relying on the explicit guarantees and incentives in this scheme. In 2009 and 2010 Czech Republic amended the Support Scheme, the amendments consisted of 26 % solar levy and withdrawal of tax exemption. The Claimants argued that the amendments gave rise to breaches of their legitimate expectations, guaranteed inter alia under the FET clause. The tribunal held that there could only be a violation if legitimate expectations generated by specific commitments are affected.192 The majority, however, held that there was no separate guarantee of an absolute FIT price level, set independently of the guarantees of a payback of capital expenses and an annual return on investment. The tribunal held that the guarantees of return to investors as the groundwork of the renewable energy promotion regime had been complied with by Czech Republic. As such the majority held there was no breach of legitimate expectations: the claimants continued to receive a level of revenue that ensured a payback of capital expenses and a return on investment over a period of 15 years.193 In his dissent, Born rejected the majority’s finding. He argued that Czech Republic had provided a plain and unequivocal statutory guarantee for a fixed FIT for the duration of the investment and the claimants invested relying on this guarantee. The entire regime was a commitment guaranteed by the state and should therefore not be amended. 65 Further, in Mesa v. Canada,194 a dispute arose because the investor, a company engaged in the development of renewable energy projects in the wind sector was denied a successful bid in tenders under Canada’s FIT program for power purchase agreements due to transmission constraints. However, while the FIT program was ongoing, Canada entered into a Green Energy Investment Agreement (GEIA) with a consortium led by Samsung to establish and operate manufacturing facilities for wind and solar generation equipment in Ontario. The consortium was also given priority access to certain transmission capacity. When a claim for breach of FET was brought in this dispute, it was dismissed on the grounds that the measure of the government was merely a procurement that was exempted from the scope of NAFTA. Consequently, the government had preserved its right to pursue its policy objectives through procurement, even when they are discriminatory.195 Consequently, this indicates the State has police powers to choose what form of renewable energy is most suited to achieving its objectives. 66 In Naftrac v. Ukraine,196 the dispute was about a joint implementation mechanism under Article 6 of the Kyoto Protocol which allows a party to go to another country, develop a project and take credits back to its home country in terms of carbon credits. It 64

Negro, Ltd. v. Bolivarian Republic of Venezuela, 863 F.3d 96 (2d Cir. 2017) & Micula v. Gov’t of Romania, 2017 WL 4772435 (2d Cir. Oct. 23, 2017). 191 Jürgen Wirtgen, Stefan Wirtgen, Gisela Wirtgen and JSW Solar (zwei) GmbH & Co. KG v. Czech Republic, PCA Case No. 2014-03. 192 Ibid. para. 436–437. 193 Ibid. para. 469. 194 Mesa Power Group, LLC v. Government of Canada, UNCITRAL, PCA Case No. 2012-17. 195 Mesa Power Group, LLC v. Government of Canada, UNCITRAL, PCA Case No. 2012-17 para. 378. 196 Naftrac Limited v. National Environmental Investment Agency (Ukraine), PCA Arbitration (Optional Environmental Rules), Award (4 December 2012).

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was argued in this case that carbon credits are a form of protected investment. In Allard v. Barbados,197 there was investment into an ecotourism facility. The beautiful natural surroundings were being left to rot. The investor claimed breach of the Convention on Biological Diversity, the Ramsar Convention and international law. The investor claimed that Barbados had ‘failed to take reasonable and necessary environmental protection measures and, through its organs and agents, has directly contributed to the contamination of the Claimant’s eco-tourism site, thereby destroying the value of his investment.’198 This is a seminal case from the point of view of enforcing climate change obligations on States through international investment law. The success of this case for climate change and sustainability activists lies in its recognition that a claim to enforce international obligations arising from climate law could in fact be brought before the tribunal by an investor. Although the investor eventually lost out at the merits stage on facts, the award on jurisdiction is of direct relevance as the tribunal held that it did have jurisdiction to adjudicate the investor’s environmental claim. Finally, in addition to the renewable energy cases, Ecuador’s successful counterclaim 67 in Burlington Resources v. Ecuador for environmental damage has important implications for the consideration of climate change in investment disputes.199 Burlington Resources acquired and operated the exploration and development of oilfields in Ecuador. While the jurisdiction of the counterclaim was initially challenged, it was later agreed by the parties to adjudicate the counterclaim to limit parallel proceedings and multiple decisions.200 The tribunal found that national Ecuadorian law was applicable, notably as contained in several Ecuadorian Supreme Court decisions and that this contained a strict liability provision for environmental damage. The tribunal found damage at 40 sites across two oil fields and in its damages analysis assessed the cost of remediation. In total Ecuador was awarded USD 41 million for infrastructure and environmental damage.201 Notable in this case is the tribunal’s willingness to engage in a substantial analysis of Ecuadorian environmental law remediation obligations. There are numerous ways that can be used to argue that a measure to prevent climate 68 change is not in violation of the norms on investor protection. One way is to show that the measure should be read as part of the investment treaty. Another way is to argue that in any case, the police powers doctrine is a rule, not an exception: the State is well within its powers to adopt any measures necessary to prevent climate change. However, it appears that the future path to bring environmental protection within the fold of investment law lies in getting investors to invoke classical concepts of investment law to protect their own investments. The renewable energy cases discussed above are emerging as a forceful reminder of 69 the importance of an integrated and balanced approach to achieving sustainable development and indicate that investment law can act to frustrate but also to foster sustainable energy investment. Further, these cases raise questions about how to provide legal frameworks necessary to catalyse renewable energy investment, while avoiding unduly costly corporate subsidies, and allowing public policies to respond to changing circumstances in terms of government priorities, fiscal constraints, and market dynamics. They suggest that investment law is solely neither sword nor shield for 197

Peter A. Allard v. The Government of Barbados, UNCITRAL, PCA Case No. 2012-06. Peter A. Allard v. The Government of Barbados, UNCITRAL, PCA Case No. 2012-06, Award on Jurisdiction, 13 June 2014, para. 3. 199 Burlington Resources Inc. v. Republic of Ecuador, Decision on Counter-Claims, ICSID Case No. ARB/ 08/5, 7 February 2017. 200 Ibid. para. 6. 201 Ibid. 198

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measures to respond to climate change and to promote clean, renewable energy. Rather, in each dispute, there is a need to make a sound case.202

V. Conclusions Certain sustainable development progress is being made in international investment law, as international law and policy further prioritized the need to make finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development, as per the UNFCCC Paris Agreement, and to take bold action on climate change, as outlined in the global SDGs. New investment-related developments in trade, climate change, ozone and aviation instruments, as well as renewable energy and climate related investment arbitrations and domestic litigations, illustrate both progress and remaining gaps in climate law and governance. 71 More broadly, recent developments suggest that the world has reached the crossroads. All sectors of society can either contribute to the solutions, or become obsolete and increasingly, face litigation for the harm that they cause. Alongside domestic climate change litigation that is increasingly common, international law and policy has the power and the potential to either foster or frustrate prompt and effective action on climate change. There is an important opportunity to strengthen and bolster investment in climate, renewable energy, and as such, to support sustainable development. In this regard, it is critical to continually update international and domestic legal regimes to ensure that they are supportive of renewable, green and sustainable development in a carbon-constrained world. With multiple sustainable developments in international investment law and policy, as well as in climate law and policy, there is an opportunity to bolster investment in renewable energy, and climate mitigation and adaptation. It is hoped, taking the risks and urgency emphasized by the IPCC in its recent Report on need to keep warming below 1.5 degrees world-wide, that nations will seize the day. 70

202 For further discussion, see Cordonier Segger/Gehring, Overcoming Obstacles with Opportunities: Trade and Investment Agreements for Sustainable Development, in: Schill/Tams/Hofmann, International Investment Law and Development: Bridging the Gap, Edward Elgar, 2015; Cordonier Segger, Innovative Legal Solutions for Investment Law and Sustainable Development Challenges, in: Levashova et al., Bridging the Gap Between International Investment Law and the Environment, Eleven International Publishing, 2015. See also Cordonier Segger/Gehring, Climate Change and International Trade and Investment Law, in: Rayfuse/Scott, supra (fn. 64). And see Cordonier Segger/Gehring/Newcombe, Conclusions: Promoting Sustainable Investment through International Law, in: Cordonier Segger/Gehring/Newcombe, Sustainable Development in World Investment Law, Kluwer Law International, 2012.

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I. The Paris Climate Agreement and liability issues* Bibliography: Abbott, Orchestration: Strategic Ordering in Polycentric Governance, in: Jordan/ Huitema/ van Asselt/Forster (eds.), Governing Climate Change: Polycentricity in Action?, CUP 2018, p. 188; van Asselt, The Role of Non-State Actors in Reviewing Ambition, Implementation and Compliance under the Paris Agreement, 6 Climate Law 91 (2016); Bach, Human Rights in a Climate Changed World: The Impact of COP 21, Nationally Determined Contributions, and National Courts, 40 Vermont Law Review 561 (2016); Bodle/Oberthür, Legal Form and Nature of the Paris Outcome, 6 Climate Law 40 (2016); Bodle/Oberthür, Legal Form of the Paris Agreement and Nature of Its Obligations, in: Klein et al. (eds.), The Paris Agreement on Climate Change, OUP 2017, p. 91; Bodansky, The Legal Character of the Paris Agreement, 25 RECIEL 142 (2016); Bodansky, The Paris Climate Change Agreement: A New Hope?, 110 AJIL 288 (2016); Boom/ Richards/Leonard, Climate Justice: The international momentum towards climate litigation, 2016, https:// www.boell.de/sites/default/files/report-climate-justice-2016.pdf; Brunnée, COPing with Consent: Law-Making Under Multilateral Environmental Agreements, 15 Leiden Journal of International Law 1 (2002); Bulmer/ Doelle/Klein, Negotiating History of the Paris Agreement, in Klein et al. (eds.), The Paris Agreement on Climate Change, OUP 2017, p. 50; Burgers, Should Judges Make Climate Change Law?, 9 Transnational Environmental Law 55 (2020); Burkett, Loss and Damage, 4 Climate Law 119 (2014); Burkett, Reading Between the Red Lines: Loss and Damage and the Paris Outcome, 6 Climate Law 118 (2016); Chan/Ellinger/ Widerberg, Exploring national and regional orchestration of non-state action for a < 1.5°C world, 18 International Environmental Agreements 135 (2018); Colombo, Enforcing International Climate Change Law in Domestic Courts: A New Trend of Cases for Boosting Principle 10 of the Rio Declaration?, 35 UCLA Journal of Environmental Law and Policy 98 (2017); Crosland/Meyer/Wewerinke-Singh, The Paris Agreement Implementation Blueprint: A Practical Guide to Bridging the Gap between Actions and Goal and Closing the Accountability Deficit (Part 1), 24(3/4) Environmental Liability 114 (2016), quoted from: https:// ssrn.com/abstract=2952215; Crosland/Meyer/Wewerinke-Singh, The Paris Agreement Implementation Blueprint: Avenues to Blueprint Implementation (Part 2), 24(5) Environmental Liability (2016); quoted from: https://ssrn.com/abstract=3055523; Doelle, The Paris Agreement: Historic Breakthrough or High Stakes Experiment?, 6 Climate Law 1 (2016); Falk, ‘Voluntary’ International Law and the Paris Agreement, https:// richardfalk.wordpress.com/2016/01/16/voluntary-international-law-and-the-paris-agreement/ (16 January 2016); Faure/Peeters, Liability and Climate Change, Oxford Research Encyclopedias, Online Publication, Apr 2019, DOI:10.1093/acrefore/9780190228620.013.648; Franzius, Das Paris-Abkommen zum Klimaschutz als umweltvölkerrechtlicher Paradigmenwechsel, 15 Zeitschrift für Europäisches Umwelt- und Planungsrecht (EurUP) 166 (2017); Hänni, Menschenrechtsverletzungen infolge Klimawandels, Europäische GrundrechteZeitschrift (EuGRZ) 1 (2019); IPCC, Special Report: Global Warming of 1.5°C, 2018, https://www.ipcc.ch/ sr15/; Klein/Carazo/Doelle/Bulmer/Higham (eds.), The Paris Agreement on Climate Change. Analysis and Commentary, OUP 2017; Knox, Linking Human Rights and Climate Change at the United Nations, 33 Harv. Envtl. L. Rev. 477 (2009); Knox, The Paris Agreement As a Human Rights Treaty (June 6, 2018), in: Akande/ Kuosmanen/McDermott/Roser (eds.), Human Rights and 21st Century Challenges, OUP 2020, quoted from: https://ssrn.com/abstract=3192106; Lees, Responsibility and liability for loss and damage after Paris, 17 Climate Policy 59 (2017);Limon, Human Rights Obligations and Accountability in the Face of Climate Change, 38 Ga. J. Int’l & Comp. L. 543 (2010); Lord/Goldberg/Rajamani/Brunnée (eds.), Climate Change Liability, CUP 2012; Lyster, Climate justice, adaptation and the Paris Agreement: a recipe for disasters?, 26 Environmental Politics 438 (2017), quoted from: Sydney Law School Research Paper No. 16/104, https://ssrn. com/abstract=2883910; Mace/Verheyen, Loss, Damage and Responsibility after COP21: All Options Open for the Paris Agreement, 25 RECIEL 197 (2016); Nachmany/Fankhauser/Setzer/Averchenkova, Global trends in climate change legislation and litigation, 2017 update, Grantham Research Institute on Climate Change and the Environment, May 2017; Nachmany/Setzer, Global trends in climate change legislation and litigation: 2018 snapshot, Grantham Research Institute on Climate Change and the Environment, May 2018; Obergassel/ Arens/Hermwille/Kreibich/Mersmann/Ott/Wang-Helmreich, Phoenix from the ashes: an analysis of the Paris Agreement to the United Nations Framework Convention on Climate Change – Part I, 27 ELM 243 (2015); Rajamani, Ambition and Differentiation in the 2015 Paris Agreement: Interpretative Possibilities and Underlying Politics, 65 ICLQ 493 (2016); Rajamani, Guiding Principles and General Obligation (Article 2.2 and Article 3), in: Klein et al. (eds.), The Paris Agreement on Climate Change, OUP 2017, p. 131; Roberts, Comparative International Law: The Role of National Courts in International Law, 60 ICLQ 57 (2011); Rosso *

The authors would like to thank Michael Gerrard for valuable comments on this text.

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Part 3. State liability under international and European law Grossman, Climate Change and the Individual, 66 AJCL 345 (2018); Saiger, Domestic Courts and the Paris Agreement’s Climate Goals: The Need for a Comparative Approach, 9 Transnational Environmental Law 37 (2020); Savaresi, Human Rights and Climate Change, in: Honkonen/Romppanen (eds.), International Environmental Law-making and Diplomacy Review 2018, University of Eastern Finland – UNEP Course Series 18, 2019, p. 31; Savaresi/Auz, Climate Change Litigation and Human Rights: Pushing the Boundaries, 9 Climate Law 244 (2019); Setzer/Byrnes, Global trends in climate change litigation, London: Grantham Research Institute on Climate Change and the Environment and Centre for Climate Change Economics and Policy, London School of Economics and Political Science, 2019 snapshot; Setzer/Nachmany, National Governance, in: Jordan/ Huitema/van Asselt/Forster (eds.), Governing Climate Change: Polycentricity in Action?, CUP 2018, p. 47; Siegele, Loss and Damage (Article 8), in: Klein et al. (eds.), The Paris Agreement on Climate Change, OUP 2017, p. 224; Slaughter, The Paris Approach to Global Governance, https://scholar. princeton.edu/sites/default/files/slaughter/files/projectsyndicate12.28.2015.pdf (28 December 2015); Spash, This Changes Nothing: The Paris Agreement to Ignore Reality, 13 Globalizations 928 (2016); Streck/ Keenlyside/v. Unger, The Paris Agreement: A New Beginning, 13 JEEPL 3 (2016); Thompson, The Global Regime for Climate Finance, in: Carlarne/Gray/Tarasofsky (eds.), The Oxford Handbook of International Climate Change Law, OUP 2016, p. 137; UNEP, The Status of Climate Change Litigation – A Global Review, May 2017; https://www.unenvironment.org/resources/publication/status-climate-change-litigation-global-review; UNEP, Emissions Gap Report 2019, https://wedocs.unep.org/bitstream/handle/20.500.11822/30797/ EGR2019.pdf?sequence=1&isAllowed=y; Verheyen, Climate Change Damage and International Law: Prevention Duties and State Responsibility, Leiden: Martinus Nijhoff Publishers 2005; Viñuales, The Paris Climate Agreement: An Initial Examination, in C-EENRG Working Papers, no. 6, 15 December 2015, https://papers. ssrn.com/sol3/papers.cfm?abstract_id=2704670; Wewerinke-Singh, Remedies for Human Rights Violations Caused by Climate Change, 9 Climate Policy 224 (2019); Wewerinke-Singh/Doebbler, The Paris Agreement: Some Critical Reflections on Process and Substance, 39 UNSW 1486 (2016); Winter, Armando Carvalho and Others v. EU: Invoking Human Rights and the Paris Agreement for better Climate Protection Legislation, 9 Transnational Environmental Law 137 (2020); Yamineva, Climate Finance in the Paris Outcome: Why Do Today What You Can Put Off Till Tomorrow?, 25 RECIEL 174 (2016); Zahar, The Paris Agreement and the Gradual Development of a Law on Climate Finance, 6 Climate Law 75 (2016).

Contents I. Introduction ..................................................................................................... II. The Paris Agreement and the legal nature of its provisions ................ 1. The Paris Agreement – binding or not binding?................................ 2. Obligations in the main action areas ..................................................... a) Mitigation................................................................................................ aa) The mitigation target – solely nationally determined?.......... bb) Implementation of the reduction targets.................................. cc) The ambition gap and the budget approach ........................... b) Adaptation .............................................................................................. c) Loss and damage ................................................................................... aa) Exclusion of liability under Art. 8.............................................. bb) Examination of responsibility ..................................................... d) Finance .................................................................................................... 3. Compliance and enforcement.................................................................. III. The Paris Agreement in the courtroom .................................................... 1. Interplay between the international and national level ..................... 2. The Paris Agreement in domestic litigation......................................... 3. Rights-based litigation ............................................................................... a) The Paris Agreement in human rights litigation – where does it feed in?..................................................................................................... b) Case law................................................................................................... c) Conclusion .............................................................................................. 4. Adjudication in planning decisions........................................................ 5. Some general remarks: the importance of considering the national context........................................................................................................... IV. Conclusion and outlook ................................................................................

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I. Introduction The Paris Agreement1, the latest treaty under2 the United Nations Framework Con- 1 vention on Climate Change (UNFCCC)3, does appear quite ambitious and holistic in its approach. Not only does it set the goal to keep global warming to well below 2°C and pursue efforts to limit the temperature increase to 1.5°C above pre-industrial level.4 It also includes the issue of adaptation to the adverse impacts of climate change prominently as one of its main goals5 and addresses the issue of residual loss and damage in an alonestanding article6. Yet, the Paris Agreement was exposed to strong criticism for its lack of substantial binding obligations as well as strong enforcement mechanisms.7 In contrast to the top-down approach taken by its predecessor, the Kyoto Protocol8, the Agreement relies on “nationally determined contributions” (NDCs)9. Whereas under the Kyoto Protocol reduction targets were internationally negotiated and subsequently imposed obligations,10 contracting parties to the Paris Agreement autonomously decide on their respective contributions.11 With its soft target setting and its facilitative, non-confrontative compliance mechanism as well as with its expansion to all country parties the Paris Agreement was hoped – and did achieve – to attract more acceptance. To encourage states to do what is needed to comply with its goals the Agreement relies on a strong transparency framework, flanked by binding communication obligations, and a regular global stocktake to inform the parties about the actual state of the implementation of the Agreement. However, the communicated NDCs are far away from giving hope to reach the long-term temperature goal as set out in the Paris Agreement. Even if they were all implemented, they would lead us to a rise in temperature of 3.2°C.12 Further, while dealing with the issues of adaptation and loss and damage, the Paris 2 Agreement neither includes a comprehensive financing concept for adaptation nor addresses liability for loss and damage – both impacts that already occur and will rise in the decades to come due to greenhouse gas emissions contributed disproportionally by developed countries since the beginning of the industrialisation and affecting disproportionally developing country parties. While an accountability gap is apparent, the bottom-up approach, as adopted by the 3 Paris Agreement, does not render the Agreement totally unenforceable. The lack of 1 Paris Agreement (Paris, 13 December 2015; in force 4 November 2016) FCCC/CP/2015/10/Add.1, Annex, hereinafter also referred to as “Agreement” or “PA”. 2 On the relationship between the Agreement and the Convention cf Wewerinke-Singh/Doebbler, 39 UNSW 2016, 1486 (1497 et seq.). 3 United Nations Framework Convention on Climate Change (New York, 9 May 1992; in force 21 March 1994) 1771 UNTS 107. 4 PA, Art. 2.1(a). 5 Ibid., Art. 2.1(b), Art. 7. 6 Ibid., Art. 8. 7 Spash, 13 Globalizations 2016, 928; Falk, ‘Voluntary’ International Law and the Paris Agreement (16 January 2016). 8 Kyoto Protocol to the United Nations Framework Convention on Climate Change (Kyoto, 11 December 1997; in force 16 February 2005) FCCC/CP/1997/7/Add.1, hereinafter “KP”. 9 PA, Art. 3. 10 KP, Art. 3. 11 On the background to the Paris Agreement cf Bulmer/Doelle/Klein, in: Klein et al. (eds.), The Paris Agreement on Climate Change, Oxford University Press, 2017, 50. NDCs not only refer to mitigation measures, but include adaptation measures, finance, technology transfer as well as transparency, PA, Art. 3. 12 UNEP, Emissions Gap Report 2019, 13.

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legally binding substantive obligations stays in stark contrast to an ever-growing number of cases since13, with many of them relying directly or indirectly on the Paris Agreement. By relying on enforcement on the ground, the Paris Agreement does show considerable effect on litigation worldwide, especially on the domestic level. This chapter will examine what the Paris Agreement does provide with respect to the issue of liability. In a first step the Paris Agreement and the legal nature of its provisions are examined further (II.). In a second step the application of the Paris Agreement in domestic litigation is assessed (III.), followed by a conclusion and outlook of the Agreements’ impact in practice (IV.)

II. The Paris Agreement and the legal nature of its provisions 4

This part concentrates on the Paris Agreement as a treaty and the obligations it imposes on the parties. The Paris Agreement has already been subject to extensive analysis during the previous years, which will not all be reiterated here.14 After briefly addressing the question whether the Agreement is legally binding (1.) the focus will be on the main areas of action – mitigation, adaptation and loss and damage – and the cross-cutting issue of finance (2.). This assessment is led by the question whether the respective provisions contain substantial obligations giving rise to liability issues. Finally, the Paris Agreement’s approach to compliance is presented (3.).

1. The Paris Agreement – binding or not binding? The Paris Agreement is a binding treaty under international law. While some scepticism as to the legal form of the “Agreement” has been expressed at the beginning of the debate,15 the legal status of the Paris Agreement does not seem to be seriously contested anymore and there is no disagreement in this regard among the states.16 As a treaty, it does create binding obligations, with which the States must comply. Distinct from the question of the legal character of the Paris Agreement as such is the legal qualification of its provisions. These differ and do not all contain legally binding obligations. 6 The Paris Agreement consists of a mixture of mandatory and non-mandatory provisions. Whether a particular provision contains a mandatory obligation usually depends on the choice of the verb. Binding obligations are expressed by the most prescriptive formulation “shall” while the softer verb “should” introduces a recommendation. The character of non-normative verbs like “will” or “are to” is less clear, as both refer to the future and do not belong to the set of typical treaty language. “Are to” is arguably stronger in its prescriptiveness than the softer, more descriptive formulation “will” and can thus be perceived as indicating a duty.17 Furthermore the provisions vary 5

13 Setzer/Byrnes, Global trends in climate change litigation, 2019 snapshot; Nachmany et al., Global trends in climate change legislation and litigation, 2017 update. 14 Cf Klein et al. (eds.), The Paris Agreement on Climate Change, 2017; Bodansky, 110 AJIL 2016, 288; Doelle, 6 Clim Law 2016, 1; Obergassel et al., 27 ELM 2015, 243; Streck et al., 13 JEEPL 2016, 3. 15 Slaughter, The Paris Approach to Global Governance (28 December 2015); Falk, supra (fn. 7). 16 Bodansky, supra (fn. 14), 296; although within the US legal system the PA is treated as an “international agreement other than treaty”. For this qualification, which enabled the executive to enter the PA without approval of the Senate, it was decisive that it did not impose new substantial obligations upon the US, see Obergassel et al., supra (fn. 14), 248. 17 Bodle/Oberthür, in: Klein et al. (eds.), The Paris Agreement on Climate Change, 2017, 91 (98); different opinion expressed by Bodansky, 25 RECIEL 2016, 142 (145), who qualifies “will” as well as “are to” as sole statements by the parties about their goals, values or expectations.

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in whom they address. Some provisions apply to each party, creating individual obligations, others refer to “all parties” and still others do not have any subject. Overall, the structure of the Agreement divides between strong procedural obligations 7 with a mandatory character and more “soft” substantial obligations. The obligations addressing mitigation targets and action, adaptation support as well as loss and damage are expressed in soft terms, while the accompanying procedural requirements – communication of the NDCs or the global stocktake – are mandatory. This issue will be examined in more depth in the section below for each of the action areas. Before considering whether the provisions contain obligations which might give rise to liability it seems important to clarify that this assessment is restricted to the provisions of the Paris Agreement in question. If it is found that a provision falls short of prescribing a specific conduct, this does not mean that the respective conduct is not required under an obligation arising from other sources of international law.18

2. Obligations in the main action areas a) Mitigation. The provisions relating to mitigation are contained in Art. 4 of the 8 Agreement and can be divided into procedural and substantive provisions. It is remarkable that the binding obligations of conduct contained in this article – induced by the word “shall” – mainly relate to procedural requirements: Each party shall prepare, communicate and maintain successive NDCs that it intends to achieve.19 Each Party shall communicate its NDC every five years.20 In communicating their nationally determined contributions, all parties shall provide the information necessary for clarity, transparency and understanding.21 The provisions regarding the mitigation measures themselves – mainly the ambition of the target and its implementation – are formulated in less prescriptive language, thus being described as the “soft belly”22 of the Agreement. aa) The mitigation target – solely nationally determined? In contrast to the Kyoto 9 Protocol the mitigation target set by each party individually is nationally determined. But are there any requirements included in the Paris Agreement, any criteria against which the parties have to measure their targets, given that the main goal of the Agreement is to hold the increase of the global temperature to at least well below 2°C? In order to achieve the long-term temperature goal, parties “aim to” reach global 10 peaking of greenhouse gas emissions as soon as possible. They also aim to undertake rapid reductions thereafter, with the objective of achieving a balance between emissions and removals by sinks in the second half of this century.23 Even though these criteria, coupled with the explicitly mentioned underlying principle of equity, should serve to guide the parties when determining their mitigation targets and set a strong expectation, they lack a legally binding character. The same is true of the expectation of progression and the highest possible ambition 11 of the mitigation contributions. According to Art. 4.3 each Party’s successive NDC 18 On the issue of state liability for climate change under international law cf Wewerinke-Singh, State Responsibility, Climate Change and Human Rights Under International Law, 2018; Verheyen, Climate Change Damage and International Law: Prevention Duties and State Responsibility, 2005; see further Lord et al. (eds.), Climate Change Liability, 2012; Faure/Peeters, Liability and Climate Change, Oxford Research Encyclopedias, Apr 2019. 19 PA, Art. 4.2. 20 PA, Art. 4.9. 21 PA, Art. 4.8. 22 Viñuales, The Paris Climate Agreement: An Initial Examination, C-EENRG Working Papers No. 6, 2015, 1 (5). 23 PA, Art. 4.1.

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“will” represent a progression beyond the Party’s current NDC and reflect its highest possible ambition, reflecting its common but differentiated responsibilities and respective capabilities (CBDRRC) in the light of different national circumstances. The verb “will” is somewhat ambiguous and the interpretation of this provision and its legal implication differs. While some commentators understand this provision as setting out a requirement – an obligation of non-regression24 – others have interpreted “will” as a softener on the prescriptiveness.25 Due to the use of descriptive, rather than mandatory language, the provision falls short of introducing a mandatory obligation.26 However, it does create a strong good faith expectation. Also the provision in the following paragraph, Art. 4.5, according to which developed country Parties should continue taking the lead by undertaking economy-wide absolute emission reduction targets, is soft, using the verb “should”. 12 Thus, with regard to the substance of the NDCs the Paris Agreement falls short of introducing a clear and legally binding set of rules, against which the commitment of the parties can be measured. Neither the quality of the NDCs with regard to mitigation is specified in the Paris Agreement, nor is a corrective mechanism included, in the event of a lack of ambition in the parties’ mitigation commitments. Still, these provisions send a strong signal to the states as to a common understanding and expectation of the quality of the contributions. They might therefore unfold interpretative force. bb) Implementation of the reduction targets. The Paris Agreement does not impose a legally binding obligation on a party to implement or actually achieve its NDC.27 According to Art. 4.2 parties “shall” pursue domestic mitigation measures, with the aim of achieving the objectives of their NDCs. While they are arguably obliged to act (“pursue domestic mitigation measures”, an obligation which they already had under the UNFCCC28) the language does not require the parties to actually reduce their emissions as declared in their targets. However Art. 4.2 creates an expectation that parties “intend to” (first sentence) and “aim” (second sentence) to achieve the objectives of their contributions. 14 No liability arises – under the Paris Agreement – for individual states for not achieving their target as set out in its NDC. This might be different at the national level. The targets set out at the international level in the NDCs often correspond with emission reduction targets contained in national legislation. Depending on the specific provision and the national legal context these corresponding targets might be enforceable at the national level. 13

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cc) The ambition gap and the budget approach. How to deal with the discrepancy between the more or less clearly specified long-term temperature goal of at least 2°C above pre-industrial level, and the communicated mitigation targets of the parties, which lead to a projected warming of 3.2°C29 – provided all the governments meet their pledges? The ambition gap was known to the parties before the conference started, since almost all the states did communicate their pledges before the Conference of the Parties (COP) 21. Accordingly the parties explicitly recognized this shortfall, which is quantified in the decision adopting the Agreement, where the parties note with concern, 24

Viñuales, supra (fn. 22), 5. Bodle/Oberthür, supra (fn. 17), 98; id., 6 Clim Law 2016, 40 (49) “constructive ambiguity”. 26 Bodansky, supra (fn. 14), 306; Rajamani, 65 ICLQ 2016, 493 (500). 27 Viñuales, however, is of the opinion that they may qualify under international law as both a binding unilateral act and as a “subsequent agreement” interpreting provisions of the UNFCCC and the Paris Agreement, supra (fn. 22), 5. 28 UNFCCC, Art. 4.1(b), 4.2(a). 29 UNEP, supra (fn. 12). 25

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that the estimated greenhouse gas emission levels in 2025 and 2030 do not fall within least-cost 2°C scenarios.30 It is suggested that the target expressed as “well below 2°C” can be regarded as 16 binding because of its instrumental role and its indicative formulation,31 with the consequence that at least some parties fail to fulfil their requirements under both general international law and the Paris Agreement32. The wording of Art. 2.1.(a) however does not indicate a legally binding character of the provision. It states that this Agreement aims to strengthen the global response to climate change, including by holding the increase in temperature to at least well below 2°C. “By holding” is a factual description, which creates a strong expectation, but falls short of prescribing a certain behaviour. Taking recourse to the overall structure of the Agreement it becomes apparent that it is relying heavily on voluntary contributions of the parties to reach the shared goal combined with a strong and mandatory transparency framework. The approach of the Paris Agreement to deal with this well-known discrepancy is to encourage stronger contributions over time informed by the global stocktake and the enhanced transparency framework – but in a nationally determined manner. As Doelle puts it, the Paris Agreement does not provide for a top down assessment of the adequacy of individual contributions.33 The Agreement does, however, identify principles to guide the allocation of the 17 actions needed. The principles of equity34 and of CBDRRC35 are set out in Art. 2.2 of the Agreement as guiding principles and inform the implementation of the following operational provisions.36 Further, the UNFCCC – under which head the Paris Agreement is adopted – incorporates general principles of international law as the precautionary principle and the principle of equity as well as the right to sustainable development and the obligation to reduce emissions in accordance with the best available science37. Based on these principles Crosland et al. suggest the selection of a global carbon budget and its distribution among the states, which then can be used inter alia in litigation efforts to challenge the adequacy of a Party’s prevention measure.38 Such litigation, however, would have to find their legal basis in another set of law, might it be in domestic legislation or general international law. But the Paris Agreement can help to inform the respective obligations. b) Adaptation. Adaptation concerns states’ responses to the changing climate, which 18 threatens the lives of peoples as well as ecosystems worldwide. It aims at preventing loss and damage to occur. With the Paris Agreement adaptation reached a prominent role as being included as one of the main goals in the Agreement’s Art. 2. The significant need for adaptation and its interlinkage with mitigation is recognized in Art. 7.3. In line with the acknowledgement of human rights implications when taking action to address climate change in the treaty’s preamble, Art. 7.5 provides for a gender-responsive,

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Decision 1/CP.21, para 17. Winter, 9 TEL 2020, 137 (144). 32 Crosland, 24(5) Env. Liability 2016, 1 (5); Mace/Verheyen, 25 RECIEL 2016, 197 (212), argue that the 1.5°C goal forms part of the primary obligations of the parties. 33 Doelle, supra (fn. 14), 7. 34 PA, Preamble, Art. 2.2, Art. 4.1. 35 Ibid., Preamble, Art. 2.2, Art. 4.3, 4.19. 36 Due to the predictive verb “will” rather than the prescriptive “shall” and the lack of specifically identified actors or particular action they fall short of creating a legally binding obligation. Cf further on this issue: Rajamani, in: Klein et al. (eds.), The Paris Agreement on Climate Change, 2017, 131. 37 UNFCCC, Art. 3(3), 3(1), 3(4), 4(1). 38 Crosland et al., 24(3/4) Env. Liability 2016, 114; id., supra (fn. 32). 31

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participatory and fully transparent approach, taking into consideration vulnerable groups and communities as well as knowledge of indigenous peoples. 19 However, the obligations contained in Art. 7 are mainly procedural in nature. It is remarkable though that adaptation is established as a measurable goal, being included in the country’s NDCs39 and the global stocktake40 and thus being subject to scrutiny by the international community. Yet with regard to substantive legal obligations, although the required engagement in adaptation planning processes and the implementation of action is introduced by the verb “shall” in Art. 7.9, it is softened by the parenthesis “as appropriate”. 20 The outcome of the Paris Agreement has been acclaimed a “huge success for developing country parties” due to the increased importance that was placed on adaptation.41 By others the outcome was criticized for the very wide gap remaining between the rhetoric of the Agreement and the reality of the funding available to achieve these goals.42 The truth might lie somewhere in the middle. While the prominent recognition of the significant need for adaptation can count as an important first step in the right direction, it falls short to deliver the adequate response to this need considering the immense efforts and funding required to prevent loss and damage now and in the future.43 c) Loss and damage. No matter how ambitiously the international community is going to mitigate climate change, loss and damage are occurring already now, and will increase significantly in the future. This remains true even if the parties were able to keep the global temperature increase to 1.5°C above pre-industrial level.44 In absence of a definition of the term “loss and damage” in the UNFCCC or the Paris Agreement, “permanent and irreversible impacts of human-induced climate change” might serve as a working definition.45 It describes the impacts of extreme weather events and slowonset events, such as ocean acidification, desertification, and sea level rise as well as non-economic losses, such as the loss of cultural heritage and displacement.46 There might be no issue being more delicate in the negotiation process than loss and damage, pointing out so clearly to the pervading injustice that the ones who suffer the most are the ones who did contribute the least. The issue of loss and damage is of enormous concern, especially for the Alliance of Small Island States (AOSIS) and other vulnerable parties, some of them fear their very existence. On the other hand, the majority of the developed countries did oppose even the recognition of loss and damage, as they feared this could lead to liability and ultimately compensation claims.47 22 What came out of this heated discussion is a somewhat ambiguous compromise. The importance of averting, minimizing and addressing loss and damage is recognized in an alone-standing Article, Art. 8.48 This came to the price of the inclusion of a provision in the accompanying decision according to which Art. 8 of the Agreement does not involve or provide a basis for any liability or compensation.49 Instead the issue of loss and damage was addressed by the incorporation of the Warsaw International Mechan21

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PA, Art. 3. Ibid., Art. 7.14 in conjunction with Art. 14. 41 Obergassel et al., supra (fn. 14), 253. 42 Lyster, Sydney Law School Research Paper No. 16/104, 2017, 1 (14). 43 On the provisions with regard to financing for adaptation in developing countries see below, mn. 30. 44 IPCC, Special Report on 1.5. C, 2018. 45 Cf Mace/Verheyen, 25 RECIEL 2016, 197; for a general discussion of varying definitions see Burkett, 4 Clim Law 2014, 119. 46 Burkett, 6 Clim Law 2016, 118 (119). 47 Ibid., 122. 48 Cf Siegele, in: Klein et al. (eds.), The Paris Agreement on Climate Change, 2017, 224. 49 Decision 1/CP.21, para 51. 40

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ism for Loss and Damage associated with Climate Change Impacts (WIM).50 The WIM was set up in Warsaw in 2013 under the adaptation framework, and with a narrow mandate that excluded financial support.51 Established as an interim measure, lacking a long-term institutional foundation,52 the WIM is now brought under the guidance and authority of the Conference of Parties.53 Thus, funding for loss and damage remains one of the most pressing issues and is 23 not resolved by the Paris Agreement. The broad language in Art. 8, according to which parties should enhance action and support – coupled with the qualification “as appropriate” – does not contain any agreement on whether, not to speak about how, action and support should be financed. Neither is an explicit reference to loss and damage included in the finance section. Further, the issue of displacement, while being addressed under the WIM,54 is still waiting for a comprehensive and responsible approach. aa) Exclusion of liability under Art. 8. As previously stated, liability was explicitly 24 excluded in relation to loss and damage under Art. 8. But which effect does the exclusion-clause have for the issue of liability? The impact of this clause is not as definite as it might appear at a first glance. The exclusion-clause in COP Decision 1/CP.21 para 51 is contained in a COP 25 decision with no legally binding effect. While COP decisions may entail legal force55 this effect requires a “hook”56, a provision in the underlying treaty that authorizes the COP to issue legally binding decisions. This is not the case with regard to the exclusion clause, which was thought to serve for interpretative purposes.57 The arguably most important constraint with regard to its impact is found in the clause itself by only stating that it excludes liability stemming from Art. 8 of the Agreement – thus leaving the door open to liability claims on the basis of any other provision as well as of other sources of international law. The wording of the provision is quite clear in this regard. Further, a COP decision could hardly be the basis of an exclusion extending beyond the Agreement. Still, to exclude any unclarity in this regard several countries did express their understanding as to the limited reach of the exclusion clause in reservation clauses58. In sum, the provision does not close existing avenues for liability and compensation under international law and it does not prevent states from relying upon other parts of the Paris Agreement or the UNFCCC in establishing state liability for climate change.59 bb) Examination of responsibility. Another important differentiation is convin- 26 cingly emphasized by Lees, who argues that the decision only cuts off the discussion about liability and compensation and thus does not hinder but rather could encourage the examination of responsibility for loss and damage. She defines responsibility as the 50

PA, Art. 8.2. Doelle, supra (fn. 14), 10. 52 Burkett, supra (fn. 45), 121. 53 PA, Art. 8.2, Decision 1/CP.21 para 47. 54 COP Decision 1/CP.21, para 49. 55 For a general discussion on the law-making power of the COP see Brunnée, 15 LJIL 2002, 1. 56 Burkett, supra (fn. 45), 127. 57 Bodansky, supra (fn. 17), 148. 58 Declarations made under the Paris Agreement by i.a.the Marshall Islands, Nauru and Tuvalu, cf United Nations Treaty Collection 2016, https://treaties.un.org/Pages/ViewDetails.aspx?src=Treaty&mtdsg_no=XXVII-7-d&chapter=27&clang=_en#EndDec. 59 Cf further elaboration in Burkett, supra (fn. 45), 126 et seq.; Boom et al., Climate Justice: The international momentum towards climate litigation, 2016, 12 et seq.; Wewerinke-Singh/Doebbler, supra (fn. 2), 1505 et seq. 51

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relevant factual connection between the act and the ‘real-world’ outcome, whilst liability is a legal or other normative consequence of finding that such a connection exists, whereby the connection is treated as an a priori justification for that consequence.60 The Paris Agreement defines neither of these terms, but does differentiate between them. Responsibility is referred to in the preamble, whilst what is excluded in the accompanying decision is solely and explicitly liability and compensation. Thus, while liability and compensation under Art. 8 are off the table for now, there is nothing to hinder the further elaboration and allocation of responsibility under the Paris Agreement. Arguably, this might indeed be facilitated by the fact that – due to the accompanying decision – developed countries no longer fear that the establishment of such responsibility could directly lead to any payment.61 27 The discussion about allocation of responsibility and the role the Paris Agreement could play in this field has already started.62 Indeed, looking at the devastating impacts and costs climate change has already triggered with an average warming of 1°C above pre-industrial level and considering predictions for the future,63 it is self-evident that the discussion is not over, but has just begun. To face such discussion now and find a fair and long-standing solution in a cooperative manner might be the better choice for all involved parties and could certainly be more alluring than dealing with this issue in confrontative proceedings in other fora. d) Finance. Finance is a cross-cutting issue of relevance for all the action areas such as mitigation, adaptation and loss and damage. While finance has already been addressed partly in the sections of the specific action areas the respective and common provisions are set out here together. 29 The Paris Agreement does not contain any new binding obligation with regard to finance. Finance is addressed in Art. 9, which entails the obligation for developed country parties to provide financial resources to assist developing country parties with respect to both mitigation and adaptation – but only “in continuation of their existing obligations under the Convention”.64 The mobilization of additional finance, as foreseen in the progression clause in Art. 9.3.2, is expressed in soft terms (“should”). It is also not clear which part of such additional finance goes to supporting mitigation and which part to adaptation, as the provision of scaled-up financial resources should only “aim” to achieve a balance, according to Art. 9.4. Furthermore, by referring to “developed country parties” rather than to “each developed country party” these provisions represent collective rather than individual obligations.65 The only new obligation on developed country parties contained in the provision about finance is to communicate information on provided resources – though again qualified by the terms “as applicable” and “as available” in Art. 9.5. 30 Arguably, the Paris Agreement contains ambitiously framed language in the provisions on mitigation and adaptation. However, by lacking a corresponding counterpart in the section on finance, the Agreement still falls short of providing what is actually 28

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Lees, 17 Climate Policy 2017, 59 (63). Ibid. 62 Cf i.a. Crosland et al., supra (fns 32 and 38) 63 Cf reports from the International Panel on Climate Change (IPCC), esp. Special Report: Global Warming of 1.5°C, 2018. 64 PA, Art. 9.1. Developed country parties are required under the Cancun Agreements to provide 100 billion USD long-term finance per year by 2020 to developing countries. COP Decision, para 53 contains the intention of developed countries to continue this goal through 2025, by then setting a new goal from a floor of USD 100 billion per year. 65 Bodansky, supra (fn. 17), 147. 61

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needed for its successful implementation.66 Art. 4.5 on mitigation contains an obligation to provide support to developing country parties for the implementation of mitigation efforts, recognizing that enhanced support for developing country parties will allow for higher ambition in their actions. But despite its use of the mandatory “shall” this provision does not clarify who is obliged to provide for this support nor how this support shall look like. The situation is not any better in relation to adaptation funding. Parties recognize the 31 importance of support for and international cooperation in relation to adaptation efforts as well as the importance of taking into account the needs of developing country parties, especially those that are particularly vulnerable to the adverse effects of climate change.67 However the provisions on the essential financing are not anywhere near reflecting such an understanding. Again, whilst Art. 7.13 requires in mandatory wording (“shall”) for continuous and enhanced international support for developing country parties for their adaptation efforts, the provision does not specify who is bound by this obligation. As to loss and damage, it is not even mentioned in the provision on finance. Nor does 32 Art. 8 on loss and damage set out a clear provision on how this issue should be addressed financially. Parties are asked (“should”) to enhance understanding, action and support,68 including through the incorporated WIM, but this requirement is not combined with a substantive financial obligation. Instead the already soft formulation is further weakened by the qualification “as appropriate”. In the possible areas of cooperation and facilitation, insurance solutions are mentioned,69 but again, no regulation can be found on how this is going to happen and who is going to pay for insurance solutions for whose benefit. There is no proper system established with a strong framework on how the international community is going to deal with the already occurring and expected loss and damage in a comprehensive and adequate manner.

3. Compliance and enforcement In its overall structure the Paris Agreement is not built on clearly defined enforceable 33 substantive obligations, but rather on procedural requirements and transparency. Correspondingly the Paris Agreement relies on three elements to create political momentum for ambitious pledges and to ensure their achievement: the transparency framework70, the global stocktake71, and the implementation and compliance mechanism72. All three shall be implemented in a facilitative manner.73 The transparency framework and the global stocktake shall serve to inform the parties and facilitate the achievement of the long-term goals. The implementation and compliance mechanism shall consist of an expert-committee, functioning explicitly in a “non-adversarial” and “non-punitive” manner.74 In the event of disputes arising between the parties Art. 24 refers to the provisions of 34 Art. 14 of the UNFCCC. The dispute settlement clause provides for the submission of a 66 Cf Yamineva, 25 RECIEL 2016, 174; Zahar, 6 Clim Law 2016, 75; Thompson, The Global Regime for Climate Finance, in: Carlarne/Gray/Tarasofsky (eds.), The Oxford Handbook of International Climate Change Law, 2016, 137. 67 PA, Art. 7.6. 68 PA, Art. 8.3. 69 PA, Art. 8.4.(f). 70 PA, Art. 13. 71 PA, Art. 14. 72 PA, Art. 15. 73 PA, Art. 13.3, Art. 14.1, Art. 15.2. 74 PA, Art. 15.2.

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dispute to the International Court of Justice or an arbitration tribunal, if accepted by both parties, but this clause has never been applied. 35 The Agreement’s approach to advance compliance is through shining light on the countries’ successes and shortfalls. This approach does not only serve to create pressure on the international level; it also enables domestic forces to put pressure on their governments. “This national pressure can come in many forms, including domestic legal action to hold national governments accountable for their international promises.”75

III. The Paris Agreement in the courtroom 1. Interplay between the international and national level At a first glance the Paris Agreement does not seem likely to attract litigation76 worldwide. It lacks legally binding substantive provisions, as examined in the previous section. Plus, as an international treaty it does not confer subjective rights to citizens, which could then be enforced. And still, it can be argued that the Paris Agreement has triggered a whole new wave of litigation worldwide, the vast majority taking place before domestic courts. Not only did the coming into force of the Agreement draw attention to the topic and coincide with a remarkable increase in cases addressing climate change since.77 Many litigants do expressly refer to the Paris Agreement in making their cases, relying on its provisions in their argumentation. 37 The application of the Paris Agreement in domestic litigation corresponds with its overall structure and purpose. Heavily relying on a bottom-up approach accompanied by mainly procedural top-down elements,, the Paris Agreement is based on the presumption of being enforced at the national level, as it attempts to engage several layers of government as well as non-state actors.78 This enforcement can take the form of litigation. And while not providing claimants with substantive provisions they could directly rely on the Agreement does empower litigation. First, the Agreement provides for valuable information that can be used in litigation through the transparency framework and the global stocktake. Second, while not allocating a budget or prescribing reduction targets, the Agreement does define criteria and principles which can be applied for testing the adequacy of national mitigation measures. Third, the NDCs on the international level are generally mirrored in domestic legislation,79 which in turn can be invoked or relied upon in litigation80. Furthermore, the Paris Agreement provides a legal and political context in which the litigants can frame their case. It enables citizen to articulate more precisely and forcefully concerns about the ambition gap between current policy and the policy needed to achieve the mitigation and adaptation objective as enshrined in the treaty.81 Litigation 36

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Bach, 40 Vermont Law Review 2016, 561 (581). The Sabin Center for Climate Change Law provides two comprehensive databases on U.S. and nonU.S. climate change litigation: http://climatecasechart.com/. 77 Setzer/Byrnes, supra (fn. 13). 78 Cf PA, Preamble; Decision 1/CP.21, para 110–114, 121, 122; cf van Asselt, 6 Clim Law 2016, 91; Chan/Ellinger/Widerberg, 18 International Environmental Agreements 2018, 135. The new magic word is “orchestration”, cf Abbott, in: Jordan et al. (eds.), Governing Climate Change: Polycentricity in Action?, 2018, 188. 79 According to Nachmany/Setzer, Global trends in climate change legislation and litigation: 2018 snapshot, Grantham Research Institute on Climate Change and the Environment, May 2018, all Paris Agreement signatories or ratifiers have at least one law addressing climate change or the transition to a low-carbon economy. 80 Bach, supra (fn. 75), 566. 81 UNEP, The Status of Climate Change Litigation – A Global Review, May 2017, 8. 76

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tests the compatibility of particular actions or inactions with the Agreement. People do demand that their governments’ politically easy statements about rights and objectives must be backed up by concrete, and sometimes politically difficult measures.82 This part examines how the Paris Agreement can be fruitfully applied in litigation 38 before domestic courts. Acknowledging that there have been first attempts to invoke the Paris Agreement at an international level – for instance in a communication before the United Nations Committee on the Rights of the Child83 – the vast majority of the cases can be found at the national level, raising distinct questions on how the Agreement as an international treaty can feed into domestic adjudication. After some general considerations on the application of the Paris Agreement in domestic litigation (2.) two strands of cases are examined further: cases brought under human rights or constitutional law (3.) and administrative law cases in the planning area (4.) This part will then close with some concluding remarks on the importance of the national legal context when assessing the Paris Agreement’s role in climate change litigation (5.).

2. The Paris Agreement in domestic litigation The climate crisis cannot be resolved at the international level alone. This is 39 recognized by the Paris Agreement as well.84 While people feel that the governments do not deliver what is needed at the international level, they approach national courts. In contrast to the first wave of climate change litigation, which was more narrowly 40 focused on domestic provisions, the current wave of national litigation increasingly relies on international norms and data developed via the UNFCCC and IPCCC when arguing their case under domestic laws.85 National courts do play a double role in climate change litigation: they may act both as law enactors and law creators.86 Litigation might aim at filling a governance gap, where no comprehensive climate policy or legislation is in place. In other cases litigation acts to enforce the implementation of existing laws and policies. The claimants seek to bolster their case by arguing for an interpretation of national laws and policies in line with states international obligations under the Agreement.87 International law is predominantly law between the states – states being the subject of 41 obligations and rights towards other nation states. International law thus can hardly be enforced by citizens. It does not confer subjective rights to its citizens – with human rights law being the exception. For domestic litigation to be able to take recourse to obligations stemming from the Paris Agreement a constellation within the domestic legal system is needed, that allows for international law to be considered.88 Two distinct types of cases can be found here: human rights-based litigation and cases resting on national administrative law. With regard to the former human rights law might act as a “gap filler” to provide remedies, where other areas of law do not.89 Claimants argue that the insufficient action of a specific state is violating their rights, using the Paris Agreement to give content to the duty to protect. In the latter kind of proceedings 82

Ibid., 9. Petition to the UN Committee on the Rights of the Child, Sacchi et al. v. Argentina et al. (2019). 84 Supra (fn. 78). 85 Bach, supra (fn. 75), 582. 86 Influential work on the role of domestic courts in international law has been done by Roberts, 60 ICLQ 2011, 57; applied to the context of climate change by Setzer/Nachmany, in: Jordan et al. (eds.), Governing Climate Change: Polycentricity in Action?, 2018, 47 (56); cf further Colombo, 35 UCLA Journal of Environmental Law and Policy 2017, 98, and Saiger, 9 TEL 2020, 37. 87 Saiger, ibid., 38 et seq. 88 Ibid., 50. 89 Savaresi/Auz, 9 Clim Law 2019, 244. 83

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plaintiffs argue that a specific infrastructure project is not compatible with the obligations under the Paris Agreement as it contravenes the Agreements’ goals. 42 The cases presented below are different in several regards. They seek different remedies, under different types of national laws, some based on human rights law, some on domestic climate change legislation or administrative law. What they do have in common is their strategy: using international climate change norms to hold individual countries accountable through their domestic courts.90

3. Rights-based litigation a) The Paris Agreement in human rights litigation – where does it feed in? The devastating impact of the changing climate on human rights is broadly recognized and human rights bodies have been engaged in identifying human rights obligations with regard to climate change.91 Claims based on alleged human rights violations coincide with the internationally increasing prominence of the linkage between human rights and climate change, including the reference to human rights in the Paris Agreements’ preamble.92 The advantages of taking a human rights approach to the matter of climate change are, as Savaresi points out, that it allows to translate climate change concerns in terms of obligations owed directly to individuals and thus enables access to remedies that may not otherwise be available.93 44 The Paris Agreement does not constitute any new human rights obligations – it refers to “respective” obligations, which each state may already have under national, regional or international law.94 This does not taint the Paris Agreements reputation as a door-opener for human rights. The former UN Special Rapporteur on Human Rights and the Environment John Knox even called it a “human rights treaty” for being the first environmental agreement to recognize human rights obligations as an integral element of the regime it establishes.95 He analysed the Paris Agreement as to its consistency with climate-change related human rights obligations and concludes that while the Agreement is generally consistent with these obligations, the states must strengthen their commitments in order to completely fulfil them.96 With the pledges so far on the table, states will not come close to meeting the 1.5°C target set by the Paris Agreement and fall short of their collective obligation to cooperate to mitigate climate change.97 From a human rights perspective, he concludes, it is necessary not only to implement the current commitments, but also to strengthen these in order to meet the target set out in Art. 2 of the Paris Agreement.98 45 The question remains: what are the obligations for a specific country? In light of the impacts of climate change and its human cause it is apparent that states have an obligation to protect their citizens against the adverse effects of climate change on 43

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Bach, supra (fn. 75), 566. Cf i.a. OHCHR, Mapping Human Rights Obligations Relating to the Enjoyment of a Safe, Clean, Healthy and Sustainable Environment: Focus Report on Human Rights and Climate Change, 2014; OHCHR, Report of the Special Rapporteur on the Issue of Human Rights Obligations Relating to the Enjoyment of a Safe, Clean, Healthy and Sustainable Environment, A/HRC/31/52 (2016). 92 Peel/Osofsky, 7 TEL 2018, 37 (39 et seq.). 93 Savaresi, Human Rights and Climate Change, in: Honkonen/Romppanen (eds.), International Environmental Law-making and Diplomacy Review 2018, 2019, 31 (33); see also Knox, 33 Harv. Envtl. L. Rev. 2009, 477; Limon 38 Ga. J. Int’l & Comp. L. 2010, 543; Rosso Grossman, 66 AJCL 2018, 345. 94 As not all parties have ratified human rights treaties, the Paris Agreement cannot serve as a means to introduce human rights obligations which parties would not have otherwise. See Savaresi, ibid., 37 et seq. 95 Knox, The Paris Agreement As a Human Rights Treaty, in: Akande et al. (eds.), Human Rights and 21st Century Challenges, 2020, quoted from: https://ssrn.com/abstract=3192106. 96 Ibid., 2. 97 Ibid., 16. 98 Ibid., 20. 91

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human rights.99 Less obvious is indeed, how exactly those duties look like. In general, states have a broad discretion in terms of policy choices on how to fulfil a specific duty, especially when weighing competing interests, such as environmental protection and economic development. However, their discretion is not unlimited. Among the factors that have been identified by human rights bodies as relevant are procedural factors, but also whether the end result complies with the national and international environmental standards and laws adopted by the states.100 Non-compliance with obligations of conduct as contained in the Paris Agreement, including with regard to taking measures aiming to prevent global warming in excess of the long-term temperature goal, might become relevant in the context of human rights violations.101 b) Case law. The most prominent case when it comes to the enforcement of climate 46 policies by the courts is the Dutch case known by the name of the litigating NGO “Urgenda”102. The issue was the adequacy of the Dutch greenhouse gas emission reduction target, which the plaintiffs perceived as not being ambitious enough. The Supreme Court of the Netherlands did confirm in its final judgment in December 2019 the finding of the two previous instances, namely that the Dutch state is under an obligation to reduce emissions originated from Dutch soil by at least 25 % by the end of 2020. The case was directly grounded on human rights as enshrined in the European Convention of Human Rights. Remarkably, the Court embraced the idea of a global carbon budget103 and found that the Netherland is obliged to contribute its “fair share”. The Court drew on each state’s obligation to take the necessary measures under the UNFCCC as reiterated by the Paris Agreement,104 both based on the individual responsibility of states105. Having to define a specific obligation in terms of a reduction target, the Court referred to soft law. Following the case law of the European Court of Human Rights the court found that law agreements and rules, which are not binding in and of themselves may play a role in defining a specific obligation.106 Less successful so far, but still valuable with regard to the Paris Agreement’s 47 application in national litigation is a lawsuit brought in Ireland. Friends of the Irish Environment challenged the country’s national mitigation plan on the basis of the irish Climate Action and Low Carbon Development Act.107 The plan lacked substantial reduction goals in the short- and medium-term and was thus, according to the plaintiffs, ultra-vires the Act, because this would constitute a breach of the rights under the Constitution and Convention. When arguing that the plan infringed individual rights, the plaintiffs referred to the states’ commitment under the UNFCCC to achieve the stabilisation of greenhouse gas concentrations in the atmosphere at a level that will prevent dangerous anthropogenic interference with the climate system, specified by the Paris Agreements’ long-term temperature goal.108 The Supreme Court granted leave to the applicant to appeal the High Court’s dismissal.109 99

Ibid., 13. Ibid., 12. 101 Hänni, EuGRZ 2019, 1 (10). 102 Supreme Court of the Netherlands, 19/00135, NL v. Urgenda, Judgment 20 December 2019. 103 Ibid., para 4.6. 104 Ibid., para 5.7.3, 5.7.4. 105 Ibid., para 7.3.2. 106 Ibid., para 6.3. 107 The High Court, 2017 No. 793 JR, Friends of the Irish Environment CLG v. Government of Ireland et al., Judgment 19 September 2019. 108 Ibid., para 18. 109 Supreme Court, IESCDET 13, Friends of the Irish Environment CLG v. Government of Ireland et al., Determination 13 February 2020. 100

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The People’s Climate Case110 challenges European legislation for not being ambitious enough in its reduction targets, invoking fundamental rights and international law. When examining the calculation and allocation of greenhouse gas emission budgets, the plaintiffs draw on the long-term temperature goal of the Paris Agreement which they argue sets a binding upper temperature limit. The Paris Agreement is also invoked for the allocation of the remaining budget with its principles of equity and CBDRRC.111 After being dismissed by the European General Court, the case is at the time of writing pending on appeal before the European Court of Justice. 49 The Paris Agreement is not only invoked in rights-based litigation with the aim to establish more ambitious greenhouse-gas reduction targets. A group of young people in Colombia did achieve a legal victory in a lawsuit aimed at the reduction of deforestation in the Colombian Amazon. They relied on the government’s obligation to reduce deforestation both under the Paris Agreement and under national law.112 Not finally decided yet is the petition of a coalition of environmental groups in Norway, which challenges the licensing decision for petroleum activities in the Barents Sea. They argue that the decision was contrary to the right to a healthy environment as enshrined in the Norwegian Constitution, which must be interpreted in light of the Paris Agreement.113 48

c) Conclusion. How exactly the Paris Agreement feeds in varies with the exact legal basis the claimants rely on, as well as the particular constitutional framework, the role of the courts in the respective jurisdiction and the relief the claimants are seeking. It is also to be kept in mind that these kind of cases still constitute a relatively new phenomenon, with many cases not being finally decided yet. While claimants definitely draw upon each other’s experiences – as courts do too when deciding their cases114 – they may nonetheless try different lines of reasoning. 51 While the Paris Agreement does not include a specific reduction obligation – which would specify the obligation of the state and could be enforced by its citizens – it does provide a framework that claimants draw upon in several regards. By setting the longterm temperature goal well below 2°C, preferably 1.5°C, the Paris Agreement specifies what at least states are asked for, setting out a minimum standard for assessing compliance with human rights.115 Further the underlying budget approach is embraced, at least by some courts. Moreover, the Paris Agreement provides a set of criteria for the allocation of the remaining budget – namely the principles of CBDRRC and equity – which is taken up by the courts when deciding their cases. 50

4. Adjudication in planning decisions 52

The second angle of the application of the Paris Agreement in national jurisdiction takes place in administrative law – an area of law that traditionally does not have the reputation of being as exciting and innovative as the vibrant world of human rights law. 110 Carvalho et al. v. European Parliament et al., Case T-330/18, Application 24 May 2018; cf for more information: https://peoplesclimatecase.caneurope.org/documents/. 111 Winter, supra (fn. 31). 112 Supreme Court of Colombia, STC4360-2018, Future Generations v. Ministry of the Environment et al., Judgment 05 April 2018. 113 Borgarting Court of Appeal, 18-060499ASD-BORG/03, Föreningen Greenpeace Norden v. Government of Norway, Judgment 24 January 2020, http://blogs2.law.columbia.edu/climate-change-litigation/ wp-content/up-loads/sites/16/non-us-case-documents/2020/20200224_HR-2020-846-J_appeal.pdf. 114 Cf i.a. High Court, Friends of the Irish Environment v. Government of Ireland et al., supra (fn. 107), para 135 et seq., assessing the Dutch court decision in Urgenda; Verwaltungsgericht Berlin, VG 10 K 412.18, Family Farmers and Greenpeace v. Germany, Judgment 31 October 2019. 115 Crosland, supra (fn. 32), 11, also pointing out, that acting in accordance with the PA is not necessarily in accordance with human rights obligations as well.

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In lawsuits challenging the legality of planning decisions such as big infrastructure projects the Paris Agreement gained ground as a decisive game changer, drawing attention to the impacts that the projects have on the global climate. The results are mixed, however. In Australia a court denied consent to an application filed for the authorisation of an 53 open cut coal mine, finding that it would run contrary to the public interest.116 When weighing the competing interests the court gave considerable weight to the projects climate change contribution, finding that it would be at the wrong place at the wrong time: “Wrong time because the greenhouse gas emissions of the coal mine and its coal product will increase global total concentrations of greenhouse gases at a time when what is now urgently needed, in order to meet generally agreed climate targets, is a rapid and deep decrease in greenhouse gas emissions.”117 In its assessment the court not only referred to the Paris Agreement’s long-term-temperature goal in Art. 2.1.(a); it found that the approval of the project “is also likely to run counter to the actions that are required to achieve peaking of global greenhouse gas emissions as soon as possible and to undertake rapid reductions thereafter in order to achieve net zero emissions […] in the second half of the century”, a goal included in Art. 4.1.118 Furthermore, the court accepted the carbon budget approach119 and made use of the developed country’s commitment to take the lead in taking mitigation measures, when sweeping aside the objection advanced by the applicant that it could happen that instead of this project a new coal mine could be approved in a developing country.120 The first case in which a court overturned a government’s approval of an infra- 54 structure project because it would run counter to the countries climate change mitigation commitments as contained inter alia in the Paris Agreement was in re Vienna Schwechat Airport Expansion. The decision was however subsequently reversed by the Constitutional Court.121 While the Austrian Federal Administrative Court had found that a third runway would be incompatible with the country’s obligations under its Climate Protection Act, Austria’s constitution, European Law and the Paris Agreement, the Constitutional Court rejected the notion that the Paris Agreement as international law could be applicable in the domestic legal context. This case shows the importance of a national clause allowing for the consideration of the Paris Agreement in the national legal system. Such a clause was found by the court in another planning-decision lawsuit in South- 55 Africa, even though the relevant statute did not expressly name climate change as being a relevant factor. In the case of the coal-fired Thabametsi Power Project122 South Africa’s High Court found that relevant considerations for environmental review under national law include the project’s impacts on the global climate as well as the impacts of a changing climate on the project. Even though the relevant statute does not expressly name climate change as being a relevant factor, the court relied inter alia on South Africa’s commitments under the Paris Agreement to conclude that climate change must

116 Land and Environment Court New South Wales, NSWLEC 7, Gloucester Resources Limited v. Minister for Planning, Judgment 8 February 2019. 117 Ibid., para 699. 118 Ibid., para 526. 119 Ibid., para 441. 120 Ibid., para 539. 121 Verfassungsgerichtshof Österreich, E 875/2017, E 886/2017, re Vienna-Schwechat Airport Expansion, Judgment 29 June 2019. 122 High Court of South Africa, 65662/16, EarthLife Africa Johannesburg v. Minister of Environmental Affairs et al., Judgment 06 March 2017.

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be considered.123 The result was that the Minister had to issue a new decision. However, after having assessed the climate change impacts of the project, he nonetheless granted the construction permit.124 56 In Plan B Earth and Others v Secretary of State for Transport125 the approval of a third runway for the Heathrow Airport was quashed because of the government’s ignorance of the Paris Agreement. The Court of Appeal considered the long-term effects of the planning decision, acknowledging that “[b]oth the development itself and its effects will last well into the second half of this century. The issue of climate change is a matter of profound national and international importance of great concern to the public – and, indeed, to the Government of the United Kingdom and many other national governments, as is demonstrated by their commitment to the Paris Agreement”.126 However the reason why the court concluded that the government had acted unlawful when approving the project was procedural. The approval was in breach of relevant sections of the Planning Act, the legal basis for the approval of the planning decision, because the Secretary of State had failed to consider the Paris Agreement, the non-CO2-warming impacts of aviation and the climate impacts of the operation of the airport beyond 2050. While the Court of Appeal found that the Paris Agreement was part of the government’s policy and thus had to be considered in making the planning decision, it was – similar to the Thabametsi case – not said that the government had to reach a specific decision. 57 In this area of litigation the line of argumentation and the potential for the Paris Agreement to play a role differ heavily depending on the national legal framework under which the case is brought. The national legal basis needs to entail a gateway for the Paris Agreement to come in. Such gateway might be found in an explicit requirement that climate change impacts must be considered, or it might arise from national climate change legislation or from indeterminate legal terms in domestic administrative law.127 Nonetheless as the examples mentioned above show, it also does depend on the willingness of the court as well as the national legal culture and institutional backgrounds, as some courts were able to draw on the Paris Agreement much easier than others, which denied its application.

5. Some general remarks: the importance of considering the national context 58

The question of the legitimate role for courts to play in the field of climate change litigation is a popular topic for academic discussion.128 Regardless of one’s view on that issue, the assessment of the court’s role in applying and interpreting the Paris Agreement has to be nuanced. Given that the application of the Paris Agreement differs heavily depending on the subject matter as well as on the national legal provision the case is based on, the role of the courts when applying the law cannot be easily compared.129 With the Paris Agreement’s bottom-up approach it is quite difficult to extract from the case law what the implication of the Agreement’s provisions is, since in defining the Agreement’s applicability and substantive meaning, courts rely heavily on 123 The Thabametsi case as well as the Vienna Airport case are subject to a comparative assessment in: Saiger, supra (fn. 86). 124 Ibid., 47, pointing out that the decision is currently being challenged in a new appeal procedure. 125 Court of Appeal, EWCA Civ 214, Plan B Earth and Others v. Secretary of State for Transport, Judgment 27 February 2020. 126 Ibid., para 276. 127 Saiger, supra (fn. 86), 52. 128 Cf – pars pro toto – Burgers, 9 TEL 2020, 55. 129 For this reason arguing for a comparative approach instead of a prevailing governance approach: Saiger, supra (fn. 86).

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national legal norms.130 The two functions of domestic courts when applying international law as law enforcers and law creators131 come into effect with differing weight, depending not only on the relief the court is asked to provide, but also on the legal basis the court is drawing on. This does not only depend on whether the case is rested in human rights law – where not only the state is granted wide discretion, but where also the courts do have a broad interpretative playground – or in administrative law with a usually much more detailed codification. The constitutional power of the courts also plays a role, along with the legal tradition, and – last but not least – the legal provision inviting the Paris Agreement to enter the courtroom. And in some cases, the result might be that there is a lack of this type of provision to introduce the Paris Agreement’s obligations and enable their enforcement. What the majority of the cases brought so far do have in common is that they are 59 situated at the mitigation level. Most human rights-based claims ask for stronger national reduction targets or compliance with the defined targets. Administrative proceedings are directed at stopping projects which would enable significant amounts of greenhouse gases to be emitted. However, cases directed at adaptation action or addressing loss and damage taking recourse to the Paris Agreement might gain importance over time, since the necessity of addressing both areas becomes ever more apparent with the temperature rising.

IV. Conclusion and outlook “This changes nothing”132 – the main criticism the Paris Agreement was confronted 60 with was its lack of legally binding substantial obligations. The Paris Agreement does indeed rely on a softer, cooperative approach between the state parties.133 But while commentators still did quarrel about the outcome, mourning the Agreement’s failure to deliver a strong and justiciable reduction regime – the Agreement was already brought to the courts, with some of them reaching a differing judgment. Resourceful lawyers all over the world found their ways to open the doors to the courtrooms for the Agreement. How the Paris Agreement feeds in this variety of cases, brought in different jurisdictions, in different areas of law, is manifold. The Agreement might be relied upon directly, or indirectly in form of implementing national legislation. It might be the provision of information emerged through the Agreement’s framework, or the enforcement of substantial provisions, principles or goals, that are relevant to the case. Even though these provisions might not be perceived as entailing legally binding obligations under international law, they still bear significant – and sometimes decisive – legal ramifications. In rights-based cases the definition of the reduction target might be decided by soft law provisions. In administrative planning decisions the impacts of the project might be assessed against the background of the long-term temperature goal. However, which role the Paris Agreement can play in a specific case is not as much determined by the respective provision being characterized as binding or not binding under international law, in as much as it depends on a variety of factors stemming from the domestic legal background under which the case was brought. What the Paris Agreement does provide for all of the claims is a setting. 130

Ibid., 49. Roberts, supra (fn. 86). 132 Spash, supra (fn. 7). 133 For a more managerial approach cf Doelle, in: Klein et al. (eds.), The Paris Agreement on Climate Change, 2017, 375; in the sense of a legal paradigm shift Franzius, 15 EurUP 2017, 166. 131

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The Paris Agreement did create a momentum, encouraging different layers of government, non-state actors and citizens to act now. As cases were brought to the courts – often supported by activist movements – cities did form coalitions, companies did make transformation plans and people did take their protest to the street. The spirit from Paris did enter the streets, the courtrooms, and the townhalls. Activists worldwide understood that the fight against climate change is a fight we can only win together, or we will lose together, a fight that has to be based on solidarity and climate justice. This understanding is not reflected sufficiently yet in the Paris Agreement, and not in the negotiations since. 62 As important questions were left open, and negotiations seem to stumble since, the spirit that came out of Paris needs to loop back to the international negotiating process. Leaving loss and damage to the WIM and relying on voluntary financial contributions with regard to adaptation as well as mitigation support does not suffice. These questions are better to be addressed through negotiations, but if the needed progress is too long in coming, litigation on the international level can be expected.134 61

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Cf Wewerinke-Singh, 9 Climate Policy 2019, 224.

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J. Liability of EU Member States under EU law* Bibliography: Agora Energiewende, Die Kosten von unterlassenem Klimaschutz für den Bundeshaushalt, https://www.agora-energiewende.de/veroeffentlichungen/die-kosten-von-unterlassenem-klimaschutz-fuerden-bundeshaushalt/ (visited 3 Nov. 2019); Kingston/Heyvaert/Čavoški, European Environmental Law, Cambridge University Press 2017; Bodansky/Brunnée/Rajamani, International Climate Change Law, Oxford University Press 2017; Bogojević, Climate Change Law and Policy in the European Union, in: Carlarne/Gray/Tarasofsky (eds.), The Oxford Handbook of International Climate Change Law, Oxford University Press, 2016, 670; Caranta, Governmental Liability after Francovich, 52 The Cambridge L. J., 272 (1993); Council of Europe, Manual on Human Rights and the Environment, 2nd ed., Council of Europe Publishing 2012; Craig/De Búrca, EU Law, 6th ed., Oxford University Press 2015; Curtin, State Liability under private law: A new remedy for private parties, 21 Industrial L. J., 74 (1992); European Commission, EU ETS Handbook, European Union 2015; Faure/Nollkaemper, International Liability as an Instrument to Prevent and Compensate for Climate Change, Stanford J. Intl. Law, 123 (2008); Grohs, Article 258/260 TFEU Infringement Procedures: The Commission Perspective in Environmental Cases, in: Cremona (ed.), Compliance and the Enforcement of EU Law, Oxford University Press 2012, 57; Hedemann-Robinson, Enforcement of European Union Environmental Law, 2nd ed., Routledge 2015; Hinteregger, Civil Liability and the Challenges of Climate Change: A Functional Analysis, J. Eur. Tort L. 238 (2017); Johnston/Van der Marel, How Binding are the EU’s ‘Binding’ Renewables Targets?, 22 Cambridge Yearbook Eur. L. S., 176 (2016); Kokott/Sobotta, The Kadi Case – Constitutional Core Values and International Law – Finding the Balance?, 23 Eur. J. Int’l. L. 1015 (2012); Peeters, Greenhouse gas emissions trading in the EU, in: Farber/Peeters (eds.), Climate Change Law, Vol. 1, Edward Elgar 2016, 377‐387; Purnhagen/van der Zeben/Schebesta/Biesbroek, Rumbling in Robes Round 2 – Civil Court Orders Dutch State to Accelerate Climate Change Mitigation, Eur. L. Blog, 9 January 2019, https://europeanlawblog.eu/2019/01/09/rumbling-in-robes-round-2-civil-court-orders-dutch-state-to-accelerate-climate-change-mitigation/; Ringel/ Knodt, The governance of the European Energy Union: Efficiency, effectiveness and acceptance of the Winter Package 2016, Energy policy, 209 (2018); Safjan, The Horizontal Effect of Fundamental Rights in Private Law – On Actors, Vectors, and Factors of Influence, in: Purnhagen/Rott (eds.), Varieties of European Economic Law and Regulation, Springer Science, 2014, 123; Saurer, Neue Entwicklungen bei der Vollzugskontrolle im europäischen Umweltrecht, EurUP 2016, 78; Saurer/Purnhagen, Klimawandel vor Gericht – Der Rechtsstreit der Nichtregierungsorganisation “Urgenda” gegen die Niederlande und seine Bedeutung für Deutschland, Zeitschrift für Umweltrecht (ZUR) 2016, 16; Schäfer/Ott, Lehrbuch der Ökonomischen Analyse des Zivilrechts, 4th ed., Springer Science 2005; Scott, The Multi-level Governance of Climate Change, in: Craig/De Búrca (eds.), The Evolution of EU Law, 2nd ed., Oxford University Press 2011, 805, Somsen, Francovich and its Application to EC Environmental Law, in: Somsen (ed.), Protecting the European Environment: Enforcing EC Environmental Law (Blackstone Publishing 1996), 135; Vedder, Leth: Court Rules Out Francovich Claim on the Basis of the Environmental Impact Assessment Directive, Eur. L. Blog, 27 March 2013, https://europeanlawblog.eu/2013/03/27/leth-court-rules-out-francovich-claim-on-the-basisof-the-environmental-impact-assessment-directive/> (accessed on 07/05/2019); Woerdman/Roggenkamp/ Holwerda, Essential EU Climate Law, Edward Elgar 2015.

Contents I. Introduction ..................................................................................................... 1 II. Greenhouse gas reduction obligations of EU Member States under EU law ............................................................................................................... 4 III. EU Member State liability within the non-ETS sector: the obligation to purchase surplus allocations from other Member States as financial sanction ............................................................................................ 12 IV. Financial sanctions within the infringement procedure as liability mechanism........................................................................................................ 20 V. Liability of EU Member States under Francovich doctrine? ................. 28

* The authors are grateful to Kaja-Vanessa Rothfuß, Claudio Seis (both University of Tübingen) and Eva van der Zee (Hamburg University) for useful comments. The usual disclaimer applies.

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Part 3. State liability under international and European law 1. The origins, function and reasoning and doctrinal embedding of non-contractual Member State liability as developed by the Court a) Origins of Member State liability under EU law ........................... b) Requirements for Member State liability under EU law.............. 2. The Francovich criteria for state liability and climate law cases ..... a) Requirements at EU level.................................................................... b) Requirements at Member State level ................................................ c) Application of these requirements to climate change cases........ aa) Infringing a rule of law intended to confer rights on individuals........................................................................................ (i) Secondary law: EU law of emission reduction ................. (ii) Primary law: individual rights.............................................. bb) Sufficiently serious breach ........................................................... cc) Direct causal link between the breach of the obligation resting on the state and the damage sustained by the injured parties ................................................................................. 3. Does the nature of the breach of Union law require a different yardstick in climate law cases? ................................................................ VI. Conclusion........................................................................................................

29 30 31 34 34 38 39 43 44 48 50 55 58 61

I. Introduction The European Union (EU) is a key actor in international efforts to mitigate anthropogenic greenhouse gas emissions to limit the rise in global temperatures and the perils of global warming. The EU has ratified the Paris Agreement on climate change of 2015 and has repeatedly renewed the commitment to “lead the global climate action”1 thereafter. In December 2019 the EU Commission announced the strategy for a “European Green Deal” that aims towards a carbon-neutral European economy and society by 2050.2 However, the overall success of the EU in the climate change sector depends on the implementation of ambitious greenhouse gas reduction measures in the EU Member States. 2 This piece investigates whether liability of Member States resulting from EU law can be used as a tool for the enforcement of EU climate change law vis-à-vis the Member States. Thereby, we deploy a broad notion of EU Member State liability that covers all types of financial sanctions that follow from non-compliance with legal obligations under EU climate change law. 3 Following the introduction section II. provides a sketch of greenhouse gas reduction obligations of EU Member States under EU law. It sets out the “primary obligations” of EU Member States that may be subject to the “secondary obligations” of liability mechanisms that will subsequently be identified and analysed. Section III. analyses EU Member State liability within the non-Emission Trading System (ETS)-sector as a liability mechanism that operates through purchase obligations for emission allowances between EU Member States. Section IV. assesses the infringement procedure according to Article 258‐260 TFEU with particular regard to the financial sanction mechanism. Section V. discusses the relevance of the judicial doctrine of non-contractual state liability in case of violations of EU law by Member States that was first established by the European Court of Justice in the Francovich case of 1990. We will end with a conclusion (section VI.). 1

1 See Communication from the Commission, Environmental Implementation Review 2019: A Europe that protects its citizens and enhances their quality of life, 4.4.2019, COM(2019) 149 final, 4; Communication from the Commission on the 2019 Climate Action Summit hosted by the United Nations Secretary General in New York, 11.9.2019, COM(2019) 412 final, 5. 2 Communication from the Commission, The European Green Deal, 11.12.2019, COM(2019) 640 final.

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II. Greenhouse gas reduction obligations of EU Member States under EU law Ever since the common approval of the Kyoto Protocol of 1997,3 the EU Member States have committed to the joint fulfilment of legal obligations under international climate change law.4 In the implementation process to the Kyoto-Protocol, EU climate change law evolved into two dimensions: the ETS and the non-ETS sector. The legal duties of EU Member States concern both dimensions of EU climate change law.5 In the ETS sector, the ETS directive 2003/87/EC6 established an EU wide cap & trade system that was gradually extended in scope.7 Today, the ETS-system covers about 45 % of EU greenhouse gas-emissions and comprises “more than 11,000 heavy energy-using installations (power stations & industrial plants) and airlines operating between these countries”.8 The EU Member States are required to implement the cap & trade system of the ETS-directive into the domestic legal order. The ETS-System is currently in phase 3 (2013‐2020), which differs from the preceding phases 1 and 2 in various features including a central, EU-wide cap on greenhouse gas-emissions. The default mechanism for emissions allocation shifted from grandfathering to auctioning.9 The non-ETS sector includes all other sources of greenhouse gas-emissions in the Member States and covers about 55 % of EU greenhouse gas-emissions. Law and policy of Member States in the non-ETS sector was coordinated in the Burden Sharing Decision 2002/358/EC (for the period 2008‐2012)10 and in the Effort-Sharing-Decision 406/2009/EC (for the period 2013‐2020).11 Both legal acts allocated duties of greenhouse gas-emission reduction among the Member States relative to the overall economic development of each state. The basic principle of joint fulfilment has been renewed under the Paris Agreement of December 2015 that strives to limit the increase in global temperature to 1.5‐2 degree above pre-industrial levels. The EU Council ratified the Paris Agreement (PA) in October 2016 and expressed EU Member States’ intent to act jointly under the PA.12 A particularly strong expression of joint fulfilment is visible in the system of nationally determined contributions (NDCs) that is at the architectural core of the PA. EU Member States have bundled their NDCs to the goals of the PA in the common EU 3 See Council Decision of 25 April 2002 concerning the approval, on behalf of the European Community, of the Kyoto Protocol to the United Nations Framework Convention on Climate Change and the joint fulfilment of commitments thereunder, OJ L 130, 15.5.2002, 1–20. 4 Woerdman/Roggenkamp/Holwerda, Essential EU Climate Law, 2015, 22 et seq.; Bodansky/Brunnée/ Rajamani, International Climate Change Law, 2017, 178. 5 Bogojević, in: Carlarne/Gray/Tarasofsky (eds.), Oxford Handbook of International Climate Change Law, 2016, 670 et seq. 6 Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC, OJ 2003, L 275/32. 7 Scott, in: Craig/De Búrca (eds.), The Evolution of EU Law, 2nd ed. 2011, 805 (807 et seq.); Peeters, in: Farber/Peeters (eds.), Climate Change Law, Vol. 1, 2016, 377 et seq. 8 https://ec.europa.eu/clima/policies/ets_en (visited 2.11.2019). 9 https://ec.europa.eu/clima/policies/ets_en (visited 22.12.2019). 10 Council Decision 2002/358/EC of 25 April 2002 concerning the approval, on behalf of the European Community, of the Kyoto Protocol to the United Nations Framework Convention on Climate Change and the joint fulfilment of commitments thereunder, OJ 2002, L 130/1. 11 Decision No 406/2009/EC of the European Parliament and of the Council of 23 April 2009 on the effort of Member States to reduce their greenhouse gas emissions to meet the Community’s greenhouse gas emission reduction commitments up to 2020, OJ 2009, L 140/136. 12 Council Decision 2016/1841/EU of 5 October 2016, Article 1, recital (9)-(10), OJ 2016, L 282/1.

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target of reducing greenhouse gas emissions (GHG-emissions) by at least 40 % by 2030 compared to 1990, that was submitted as NDC of the EU to the Secretariat of the United Nations Framework Convention on Climate Change. 8 In the implementation process of the PA the EU has enacted a range of significant legal acts with far reaching consequences for EU Member States: Directive 2018/410/EU of the European Parliament and of the Council of 14 March 2018 revised ETS-directive 2003/87/EC and adjusted the ETS for the years after 2020 and towards the goals of the PA. The ETS system was re-enforced as “the cornerstone of the Union’s climate policy”.13 The annual reduction factor for the cap of the ETS-system was set to 2.2 % from 2021 onwards.14 The number of emission certificates that have been placed in the “market stability reserve” as a means to balance supply and demand was increased for a limited period through the end of 2023.15 9 The Effort Sharing Regulation 2018/842/EU of the European Parliament and of the Council succeeded the Effort Sharing Decision as a new legal fundament for climate change policies in the non-ETS sector for the period from 2021‐2030. Practically important emission sources in the non-ETS sector are housing, industry and the transportation sector. Annex I to Regulation 2018/842/EU allocates greenhouse gasemission-reduction-obligations among EU Member States relative to the overall economic development of each state.16 For example, Germany has to reduce greenhouse gas-emissions until 2030 compared to 2005 by 38 %, France by 37 %, Italy by 33 %, Spain by 26 % and Poland by 7 %. The EU Member States are generally free to choose the adequate policy instruments to reach these emission reduction goals. There are, however, several relevant EU legal acts that shape policies in the non-ETS sector including the new Renewable Energy Directive 2018/2001/EU,17 the renewed Energy Efficiency Directive18 and EU legislation for the transportation sector. The so called LUCLUF-Regulation 2018/841/EU has established a specific legal regime for greenhouse gas emissions and removals from land use, land use change and forestry.19 10 The Regulation 2018/1999/EU of the European Parliament and of the Council on Governance of the Energy Union and Climate Action (“Governance Regulation”)20 emphasizes the interdependence of GHG emission reduction and energy transition towards energy from renewable sources.21 The regulation establishes legal tools to coordinate climate change policies on the EU level and in the Member States. In particular, Member States are required to set up “integrated national energy and climate 13 Recital (6), Directive (EU) 2018/410 of the European Parliament and of the Council of 14 March 2018 amending Directive 2003/87/EC to enhance cost-effective emission reductions and low-carbon investments, and Decision (EU) 2015/1814, OJ 2018, L 76/3. 14 Recital (5), Directive (EU) 2018/410. 15 Recital (23), Directive (EU) 2018/410. 16 Regulation (EU) 2018/842 of the European Parliament and of the Council of 30 May 2018 on binding annual greenhouse gas emission reductions by Member States from 2021 to 2030 contributing to climate action to meet commitments under the Paris Agreement and amending Regulation (EU) No 525/ 2013, OJ 2018, L 156/26. 17 Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018 on the promotion of the use of energy from renewable sources, OJ 2018, L 328/82. 18 Directive (EU) 2018/2002 of the European Parliament and of the Council of 11 December 2018 amending Directive 2012/27/EU on energy efficiency, OJ 2018, L 328/210. 19 Regulation (EU) 2018/841 of the European Parliament and of the Council of 30 May 2018 on the inclusion of greenhouse gas emissions and removals from land use, land use change and forestry in the 2030 climate and energy framework, and amending Regulation (EU) No 525/2013 and Decision No 529/ 2013/EU (Text with EEA relevance) PE/68/2017/REV/1, OJ 2018, L 156/1. 20 Regulation (EU) 2018/1999 of the European Parliament and of the Council of 11 December 2018 on the Governance of the Energy Union and Climate Action, OJ 2018, L 328/1. 21 Ringel/Knodt, Energy policy 2018, 209 et seq.

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plans” for time periods of 10 years and submit it to the EU Commission (Art. 3 Sec. 1 Regulation 2018/1999/EU). These plans have to include a broad range of information related to climate change and energy law and policy (Art. 3 Sec. 2 Regulation 2018/1999/ EU). The remarkably long ten year-period is intended to “ensure the transparency and predictability of national policies and measures in order to ensure investment certainty”.22 In 2018/2019 the EU’s climate change reduction targets have been challenged before 11 the EU General Court.23 Mr. Armando Carvalho and a plurality of further plaintiffs challenged the most recent EU climate change legislation by way of an action of annulment. Plaintiffs considered EU climate change legislation – especially the 40 % emission reduction target for 2030 compared to 1990 – as insufficient to effectively mitigate dangerous health and property effects of global warming. Thus, they argued, the EU violated a plurality of guarantees granted in the EU charter of fundamental rights. The action for annulment was declared inadmissible. The Court cited the traditional Plaumann doctrine of the ECJ and denied standing of the plaintiffs on the grounds of a lack of individual concern according to Art. 263 Sec. 4 TFEU.24 An appeal to the ECJ is pending.25

III. EU Member State liability within the non-ETS sector: the obligation to purchase surplus allocations from other Member States as financial sanction One mechanism of Member State liability in EU climate change law is established in the 12 non-ETS sector. Both the Effort Sharing-Decision 406/2009/EC and the Effort SharingRegulation 2018/842/EU do include a variety of “flexibility mechanisms” that EU Member States can apply in case they do not meet their domestic emission reduction targets. Regulation 2018/842/EU provides for a variety of tools of flexibility that EU Member 13 States may use to compensate for exceedance of the emission budgets including the possibility to bank or borrow a limited percentage of emission allocation for a following year (Article 5). For some of the EU Member States, there is an even broader array of flexibility instruments (Article 6 and 7). As a last emission resort, a safety reserve of up to 105 m. tonnes of CO2 is established, taking into account the challenges and economic interests of Member States with a GDP below the Union average (Article 11). The purchase of surplus emission allocations is intended as an ultima ratio in case no 14 other flexibility mechanism applies. Regulation 2018/842/EU recognizes the option of transfers of emission allocations between the Member States (Article 5). The regulation conceives of the emission allocation transfer as a monetarized process, e.g., recital (20) refers to the “selling” Member State and the “receiving” Member State. However, the regulation leaves the technical details for the transfer open.25a Recital (20) of Regulation 2018/842/EU states: “[The Member States] should also be able to transfer part of their annual emission allocation to other Member States. The transparency of such transfers should be ensured, and they ought to be carried out in a manner that is mutually 22

Recital (34) Regulation 2018/1999/EU. General Court, Case T‐330/18, Armando Carvalho and Others v European Parliament and Council of the European Union, ECLI:EU:T:2019:324. 24 General Court, Carvalho v European Parliament (fn. 23), mn. 45‐50. 25 ECJ, Case C-565/19 P: Appeal brought on 23 July 2019 by Armando Carvalho and others against the order of the General Court delivered on 8 May 2019 in General Court, Carvalho v European Parliament (fn. 23). 25a On the possibility of transfers of emission allocations to other Member States in the LULUCF sector see recital (21) and Art. 12 of Regulation 2018/841/EU. 23

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convenient, including by means of auctioning, by the use of market intermediaries acting on an agency basis, or by way of bilateral arrangements. Any such transfer could be the result of a greenhouse gas mitigation project or programme carried out in the selling Member State and financed by the receiving Member State.” Eventually, the purchase of surplus emission allocations from another EU Member State may be the only alternative for an EU Member State with exceeding emissions to avoid the penalty factor (1.08) to be calculated into future emissions and corrective actions under Regulation 2018/842/EU (Article 9). Because of the legal design of the liability mechanism (time-effects of flexibility mechanisms such as borrowing, banking, etc.) it is likely that the transfer option between the Member States will be particularly important towards the end of each reference period (2013‐2020; 2021‐2030). The price formation for emission allocation transfers between EU Member States is up for negotiation from case to case. Regulation 2018/842/EU does not provide any specifications or recommendations. The perhaps most important factor will be the number of transferable emission allocations (dependent upon the quantity of Member States staying below the annual emission allocation for a given year). A projection of the German think tank Agora Energiewende for the case of Germany illustrates the potentially far reaching scope and effects of the liability mechanism. In accordance with climate scientists and authorities,26 Agora Energiewende calculates upon the premise that Germany will miss both its GHG emissions targets for 2020 and for 2030.27 Agora projects that in 2020, many EU Member States will meet their GHG-emission goals.28 As a consequence, there will be plenty of emission allocations “on the market” in 2020 (that will be invalid after 2020) so that transfers of emission allocations to Germany seem conceivable from a plurality of countries at relatively low cost.29 However, according to Agora Energiewende, EU Member States will have much bigger problems reaching the 2030 climate targets. Accordingly, the number of emission allocations available on the market will drop significantly and in turn prices will rise. In case that Germany fails to reach its goals by a relatively wide margin (as Agora Energiewende projects), the consequence would be a very significant price tag on the emission allocations need for compensation. Agora Energiewende estimates the cost for required transfers of emission allocations from other EU Member States to Germany will range between 31 and 62 billion € (calculated for the entire second reference period 2021‐2030).30 The potential scope of Member State liability under the liability mechanism in the nonETS sector is already significant enough to give incentives to politics of the presence to enhance climate change policies in order to mitigate or even prevent the high liability payments that are projected as financial burdens for future budgets of EU Member States. In Germany, the looming prospect of liability payments under the EU-BurdenSharing-Decision 2009/406/EC and Effort-Sharing-Regulation 2018/842/EU was a key legislative motive for the first German Federal Climate Change Act that was enacted in 26 Report from the Commission, EU and the Paris Climate Agreement: Taking stock of progress at Katowice COP, 26.10.2018, COM(2018) 716 final, 9. 27 Agora Energiewende, Die Kosten von unterlassenem Klimaschutz für den Bundeshaushalt, 2018, S. 15, 17 et seq.; a most recent projection holds that the German 2020 goal of a 40% GHG emission reduction compared to 1990 is within reach (minus 35,7% until 2019), see https://www.umweltbundesamt.de/ pressemitteilungen/treibhausgasemissionen-gingen-2019-u.-63-prozent (visited 18 May 2020). 28 See also Report from the Commission to the European Parliament and the Council, EU and the Paris Climate Agreement: Taking stock of progress at Katowice COP, 26.10.2018 COM(2018) 716 final. 29 Agora Energiewende (fn. 27), 16. 30 Agora Energiewende (fn. 27), 8.

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December 2019.30a The legislative proposal for the Federal Climate Change Act that had been sponsored by the parliamentary fractions of the governing parties (CDU/CSU and SPD) cited the EU liability mechanism and the aim to avoid liability payments by German taxpayers very prominently in the first paragraphs of the reasoning on “goal and necessity” of the new national climate change legislation.31

IV. Financial sanctions within the infringement procedure as liability mechanism Another liability mechanism in EU law that could remedy breaches of EU climate change law by EU Member States are financial sanctions within the infringement procedure. The infringement procedure according to Art. 258‐260 TFEU is the classical instrument to enforce EU law in the Member States. The Treaty of Maastricht amended then Art. 171 Treaty establishing the European Community (TEC) (later Art. 228 TEC) with the possibility of pecuniary penalties that is today found in Art. 260 TFEU. The Treaty of Lisbon eased the requirements in order to accelerate the infringement procedure.32 The former requirement of a “reasoned opinion” (Art. 228 TEC) has been dropped. Art. 260 Sec. 2 TFEU only requires the Commission to send a formal notice (“giving that State the opportunity to submit its observations”). On all steps of the infringement procedure the Commission has discretion, whether to continue the procedure to the next step or drop the case.33 There is a duty to give reasons for a decision to not open the infringement procedure, though.34 Art. 260 TFEU distinguishes two kinds of financial penalties: lump sum or penalty payment. The calculation method for both kinds of financial penalties is laid out in a specific communication from the Commission.35 Important aspects guiding the calculation of the penalty include “the importance of the rules breached and the impact of the infringement on general and particular interests”, “the period the EU law has not been applied” and “the country’s ability to pay, ensuring that the fines have a deterrent effect”.36 In EU environmental law, the infringement procedure is a well-established tool of law enforcement.37 Long term statistics show that between 2002 and 2013 the majority of infringement procedures in the EU concerned the environmental sector.38 Moreover, in environmental infringement procedures the ECJ regularly applies financial penalties.

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Bundes-Klimaschutzgesetz of 12 December 2019, BGBl. I p. 2513. Gesetzentwurf der Fraktionen der CDU/CSU und SPD zur Einführung eines Bundes-Klimaschutzgesetzes und zur Änderung weiterer Vorschriften, BT-Drs. 19/14337, 1 and 17. 32 Craig/De Búrca, EU Law, 6th ed., 2015, 455. 33 ECJ Case 247/87 Star Fruit/Commission [1989] ECLI:EU:C:1989:58, mn. 11; ECJ Case 422/92, Commission of the European Communities v Federal Republic of Germany [1995], ECLI:EU:C:1995:125, mn. 18. 34 Grohs, in: Cremona (ed.), Compliance and the Enforcement of EU Law, 2012, 57 (60). 35 Communication from the Commission — Modification of the calculation method for lump sum payments and daily penalty payments proposed by the Commission in infringements proceedings before the Court of Justice of the European Union C/2019/1396, OJ 2019, C 70/1. 36 https://ec.europa.eu/info/law/law-making-process/applying-eu-law/infringement-procedure_en?cookies=disabled (visited 22 August 2019). 37 Saurer, EurUP 2016, 78 (82); Kingston/Heyvaert/Čavoški, European Environmental Law, 2017, 186 et seq. 38 Hedemann-Robinson, Enforcement of European Union Environmental Law, 2nd ed. 2015, 247 et seq. 31

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For example, in two cases concerning the implementation of the Waste Framework Directive the ECJ imposed in 2014 penalty payments on Greece and Italy after both countries did not comply with an earlier judgment of the Court.39 The penalty payment towards Greece amounted to a lump sum of 10 million € and 14.52 million € for an additional 6 months of non-compliance.40 The penalty payment towards Italy amounted to a lump sum of 40 million € and 42.8 million € for an additional 6 months of noncompliance.41 25 A most recent infringement procedure of the European Commission against Ireland concerns the non-compliance with a judgment of the ECJ of 2008,42 where Ireland had failed to conduct an environmental impact assessment for a wind farm. Emphasizing the long time span of 11 years of non-compliance, in November 2019 the Court ordered Ireland to pay a lump sum of 5 million € and a penalty payment for every day between the date of the most recent judgment and the date of compliance with the 2008 judgment.43 26 In 2019 the ECJ imposed a penalty payment on Belgium, making use of Art. 260 Sec. 3 TFEU (penalty payments during the first-round infringement procedure in noncommunication cases) for the very first time.44 From the point of view of the Commission, the more systematic application of pecuniary penalties during the first-roundprocedure under Art. 258 TFEU is an instrument to strengthen the infringement procedure as a tool of enforcement, especially in non-communication cases.45 27 The Commission has already declared its intent to enforce EU climate change law by way of the infringement procedure including fines. For the ETS sector, the Commission refers to the infringement procedure as the key tool to ensure that EU legislation is correctly implemented. In its “EU ETS Handbook” the Commission explains, that it may ultimately refer a case of non-compliance of a Member State to the ECJ that could find that an infringement has taken place and impose a pecuniary penalty.46 Similarly, the Commission has declared for the non-ETS sector that it may launch infringement procedures against non-compliant Member States as an additional tool that complements the compliance tools that are already included in the Burden-Sharing-Decision 2009/406/EC and the Effort-Sharing-Regulation 2018/842/EU.47 24

V. Liability of EU Member States under Francovich doctrine? 28

This section evaluates whether and if yes under which conditions Member States can be held liable for non-action to combat climate change under EU non-contractual state liability law. EU state liability law has been developed in the Court’s case law, known mostly as the “Francovich doctrine” called after the name of one of the applicants in the EU’s first landmark decision on state liability law.48 Whether this doctrine is applicable 39

ECJ Case C-378/13 European Commission v. Hellenic Republic [2014], ECLI:EU:C: 2014:2407. ECJ Commission v. Hellenic Republic (fn. 39), mn. 79‐80, at 65. 41 ECJ Case C‐196/13 European Commission v Italian Republic [2014], ECLI:EU:C:2014:2407, mn. 120, at 112. 42 ECJ Case C‐215/06, European Commission v Ireland [2014], ECLI:EU:C:2008:3807. 43 ECJ Case C‐261/18, European Commission v Ireland [2019], ECLI:EU:C:2019:955, mn. 136. 44 ECJ Case C-543/17, European Commission v. Belgium [2019], ECLI:EU:C:2019:573. 45 Communication by the Commission, EU Law: Better results through better application, 21.12.2016, COM(2016) 8600 final, 10. 46 European Commission, EU ETS Handbook, 2015, 11. 47 https://ec.europa.eu/clima/policies/effort/framework_en (visited 3 November 2019). 48 ECJ Cases C-6/90 and 9/90 Andrea Francovich and Danila Bonifaci and others v Italian Republic [1991] ECLI:EU:C:1991:428. 40

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to climate change litigation will be investigated in the following section. We will first develop the function of EU Member State liability law as developed by the Court to determine its applicability to climate change litigation. Subsequently, we will introduce the requirements of the Francovich doctrine as they have evolved in EU legal jurisprudence, before we apply them to climate change litigation situations.

1. The origins, function and reasoning and doctrinal embedding of noncontractual Member State liability as developed by the Court The case Francovich and Bonifiaci v. Italy49 (hereinafter Francovich) concerned a case 29 where the Republic of Italy had failed to implement a Directive into national law, which protected employees in the event of their employer’s insolvency. Unlike in previous cases where Member States had insufficiently implemented Directives which granted such individual rights, provisions in the Directive lacked sufficient precision to be directly applicable.50 A situation arose under which EU citizen in one Member State would not benefit from the rights a Directive would have granted to them only because of the more open wording of the Directive and a Member State failed to implement the Directive successfully. a) Origins of Member State liability under EU law. Against this background, in 30 Francovich the Court established the principle of non-contractual state liability to pay compensation for breach of EU law by EU Member States to applicants who were not able to realize their rights granted by the EU legal order. The origins of non-contractual liability for Member States’ breach of EU law draw from general requirements of Member States’ legal systems.51 Following this reasoning, the Court is also the right institution to determine the rules of such Member State liability at EU level, as also “in many national legal systems the essentials of the legal rules governing State liability have been developed by the courts.”52 These requirements have been recognised by the EU treaties, that is why the principle in itself stems from EU law and its origins and conditions are also primarily determined by “the principles inherent in the Community legal order which form the basis for State liability, namely, the full effectiveness of Community rules and the effective protection of the rights which they confer and the obligation to cooperate imposed on Member States by Article 5 of the Treaty.”53 A guiding line to determine these conditions are the conditions the Treaty established for the liability of Union institutions for breach of EU law.54 The reason for the latter is that “it shall be avoided that to have different rules governing the liability of the Community and the liability of Member States in like circumstances, since the protection of the rights which individuals derive from Community law cannot vary depending on whether a national authority or a Community authority is responsible for the damage.”55 As a general rule, liability of Union and Member State institutions for breach of EU law hence need to develop in parallel. The remedy itself and the criteria for the extent of reparation, however, are to be determined by the Member State.56

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ECJ Francovich v Italian Republic (fn. 48). See Curtin, Industrial L. J. 1992, 74. 51 ECJ Cases C-46 and 48/93 Brasserie du Pêcheur SA v Bundesrepublik Deutschland and The Queen v Secretary of State for Transport, ex parte: Factortame Ltd and others [1996], ECLI:EU:C:1996:79, mn. 29. 52 ECJ, Brasserie v BRD (fn. 51), mn. 30. 53 ECJ, Brasserie v BRD (fn. 51), summary no. 4. 54 Caranta, Cambridge L. J. 1992, 272 (284). 55 ECJ, Brasserie v BRD (fn. 51), summary no. 4. 56 ECJ, Brasserie v BRD (fn. 51), summary no. 5. 50

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b) Requirements for Member State liability under EU law. In Francovich the Court had only implemented the requirement of Member State liability law as such. It has explicitly refrained from providing programmed requirements for such a liability claim which would be applicable to each and every case.57 Rather, these requirements depended “on the nature of the breach of Community law giving rise to the harm,”58 a phrase the Court continuously used when further specifying the three Francovich criteria.59 Hence, the well-known three requirements of Francovich are only one out of many possible prerequisites for Member State liability law. The requirements for noncontractual EU Member State liability are, as the Court has established in Brasserie du Pêcheur, the criteria set out by EU law for liability of Union institutions for breach of EU law, as they reflect principles common to all Member States, and all other liability principles common to all Member States. 32 From this it follows that the three legal criteria established in Francovich60 are not set in stone as sole criteria for Member State liability. Member State liability in climate cases could exist even if none of the Francovich criteria would be satisfied, as long as the requirements for such climate change liability are in accordance with “the nature of the breach of Community law giving rise to the harm,” the Union institutions are held liable to the same extend as Member State institutions and these requirements, which stem from the Union legal order, represent general principles of liability common to all Member States. 33 The Court’s frequent consideration of the Francovich criteria for now over 25 years and their closeness to the criteria established for Union institutions61 illustrate how the Court perceives them as principles common to Member States. As the Court held: These criteria “are necessary and sufficient to found a right in favour of individuals to obtain redress (…).”62 Hence, if a case in fact fulfils these criteria, it is very likely that EU Member State liability can be established. As a consequence, we will first investigate how the Francovich criteria relate to climate law cases. Subsequently, we will look into whether in these cases “the nature of the breach of Community law giving rise to the harm”63 would justify the application of different criteria. 31

2. The Francovich criteria for state liability and climate law cases 34

a) Requirements at EU level. In Francovich, the Court set out three legal criteria to be fulfilled64: (1) the result prescribed by the directive should entail the grant of rights to individuals; (2) it should be possible to identify the content of those rights on the basis of the provisions of the directive; (3) the existence of a causal link between the breach of the State’s obligation and the loss and damage suffered by the injured parties. In its subsequent case law the Court has continuously refined those elements. In Brasserie du Pêcheur it clarified these principles in a way that “Community law confers a right to reparation where three conditions are met: – the rule of law infringed must be intended to confer rights on individuals; – the breach must be sufficiently serious; and

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ECJ Francovich v Italian Republic (fn. 48), mn. 38. ECJ Francovich v Italian Republic (fn. 48), mn. 38. 59 ECJ, Brasserie v BRD (fn. 51), mn. 38. 60 ECJ Francovich v Italian Republic (fn. 48), mn. 40. 61 Caranta, Cambridge L. J. 1993 , 272 (284). 62 ECJ Case C-224/01 Gerhard Köbler v Republik Österreich. [2003], ECLI:EU:C:2003:513 mn. 57. 63 ECJ Francovich v Italian Republic (fn. 48), mn. 38. 64 ECJ Francovich v Italian Republic (fn. 48), mn. 40. 58

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– there must be a direct causal link between the breach of the obligation resting on the State and the damage sustained by the injured parties.”65 Hence, both, insufficiently or not-transposed Directives and any kind of infringement of directly applicable EU law can trigger state liability.66 In the case of climate change litigation, this hence covers both, climate change related secondary legislation and EU primary law. EU law confers rights on individuals when they are “unconditional and sufficiently 35 precise”.67 In cases where a breach of provisions designed to protect public health could endanger human health, the Court has applied a consequential reasoning to establish individual rights. It stated that in such cases “the persons concerned must be in a position to rely on the mandatory rules included in those directives (…).”68 The breach is sufficiently serious when “the Member State (…) manifestly and 36 gravely disregarded the limits on its discretion. The factors which the competent court may take into consideration include the clarity and precision of the rule breached, the measure of discretion left by that rule to the national (…) authorities, whether the infringement and the damage caused was intentional or involuntary, whether any error of law was excusable or inexcusable, the fact that the position taken by a Community institution may have contributed towards the omission, and the adoption or retention of national measures or practices contrary to Community law.”69 The Court has not gotten into great detail to elaborate on a reliable test of causation 37 between the breach of the obligation and the damage sustained by the injured parties. The establishment of such a causal link hence rests with Member State courts. The Court has, however, provided a relatively wide interpretation of what may be deemed to be loss or damage, comprising “any economically quantifiable detriments suffered as a result of a breach”70, not limited to “damage done to certain, specifically protected individual interests not including loss of profit.”71 However, in cases of non-contractual liability for Union institutions, the Court established that the damage needs to be specified by the claimant.72 In these cases, the burden of proof to establish a direct causal link between breach and damage rests on the applicants.73 The provision of general statistics containing too many dependent variables, which cannot clearly attribute a direct link does not fulfil this requirement.74 65

ECJ, Brasserie v BRD (fn. 51), mn. 51. ECJ, Brasserie v BRD (fn. 51), mn. 21, 22. 67 ECJ Case 148/78 Criminal proceedings against Tullio Ratti [1979] ECLI:EU:C:1979:110, mn. 20. 68 ECJ, Case C-237/07 Dieter Janecek v Freistaat Bayern [2008], ECLI:EU:C:2008:447, mn. 38; see already ECJ, Case C-361/88 Commission of the European Communities v Federal Republic of Germany [1991] ECLI:EU:C:1991:224, mn. 16, concerning Directive 80/799: “the obligation imposed on the Member States to prescribe limit values not to be exceeded within specified periods and in specified circumstances, laid down in Article 2 of the directive, is imposed “in order to protect human health in particular”. It implies, therefore, that whenever the exceeding of the limit values could endanger human health, the persons concerned must be in a position to rely on mandatory rules in order to be able to assert their rights.” 69 ECJ, Brasserie v BRD (fn. 51), mn. 55‐56. 70 Hedemann-Robinson, Enforcement of European Union Environmental Law, 346, see ECJ, Brasserie v BRD (fn. 51), mn. 90. 71 ECJ, Brasserie v BRD (fn. 51), mn. 90. 72 ECJ Case 5/71 Aktien-Zuckerfabrik Schöppenstedt v Council of the European Communities [1971] ECLI:EU:C:1971:116, mn. 9. 73 General Court T-168/94 Blackspur DIY Ltd, Steven Kellar, J.M.A. Glancy and Ronald Cohen v Council of the European Union and Commission of the European Communities [1995], ECLI:EU: T:1995:170, mn. 40. 74 ECJ Case 197‐200, 243, 245 and 247/80 Ludwigshafener Walzmühle Erling KG and others v Council and Commission of the European Communities [1981], ECLI:EU:C:1981:311, mn. 51‐55. 66

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b) Requirements at Member State level. The detailed procedural rules of noncontractual Member State liability rules are to be implemented in the internal legal order of the Member States.75 The Union requirements mentioned above serve only as a minimum requirement; Member States can implement less strict conditions for liability on the basis of national law if they wish to do so.76 The implementation obligation encompasses in particular “rules of national law on liability that the State must make reparation for the consequences of the loss or damage caused, provided that the conditions, including time-limits, for reparation of loss or damage laid down by national law are not less favourable than those relating to similar domestic claims (principle of equivalence) and are not so framed as to make it in practice impossible or excessively difficult to obtain reparation (principle of effectiveness)”.77 However, any of such Member State obligation “to make reparation for loss or damage caused to individuals cannot (…) depend upon a condition based on any concept of fault going beyond that of a sufficiently serious breach of Community law. Imposition of such a supplementary condition would be tantamount to calling in question the right to reparation founded on the Community legal order”78 Furthermore, “in order to determine the loss or damage for which reparation may be granted, the national court may inquire whether the injured person showed reasonable diligence in order to avoid the loss or damage or limit its extent and whether, in particular, he availed himself in time of all the legal remedies available to him”.79

c) Application of these requirements to climate change cases. Some voices in the literature express an optimistic expectation for the applicability of EU non-contractual liability law to climate change litigation. With regard to EU legal acts on the “EU Emissions Trading System, rules on greenhouse gas monitoring and reporting, carbon capture and storage, and fluorinated gases as well as comprehensive rules concerning the CO2 emissions of vehicle fuels” one scholar notes that “(i)n view of this abundance of legislation there is certainly room for the application of Member State liability for violation of EU law”.80 In a similar vein a scholar finds that “it is not unrealistic to predict that Member States may soon find themselves liable for damages caused by nonimplementation of EC environmental directives”81, whereby the scholar especially refers to the EIA Directive, and, in particular, those Directives primarily concerned with the protection of human health (Directive 80/779, Directive 75/440, Directive 90/219 and Directive 90/220) and Directives laying down requirements, which, if satisfied, are intended to guarantee the free movement of those products throughout the internal market (Directive 70/220 and Directive 67/548).82 40 The majority of scholars share the view that the Francovich doctrine, due to its “inherent anthropocentric bias” is considered to be “ill-suited to providing an effective remedy in respect of breaches of EU environmental legislation.”83 As it is designed to protect human beings, it could not readily be applied for environmental protection. In this vein it has been observed that in particular the 39

75 ECJ Case C-445/06 Danske Slagterier v Bundesrepublik Deutschland [2009], ECLI:EU:C:2009:178, mn. 31. 76 ECJ, Köbler v Österreich, (fn. 62), mn. 57. 77 ECJ, Danske Slagterier v BRD, (fn. 75), mn. 31. 78 ECJ, Brasserie v BRD (fn. 51), mn. 79. 79 ECJ, Brasserie v BRD (fn. 51), mn. 84. 80 Hinteregger, J. Eur. Tort L. 2017, 238 (241 et seq., fn. 14). 81 Somsen, in: Somsen (ed), Protecting the European Environment: Enforcing EC Environmental Law, 1996, 135 (150). 82 Ibid, 146‐148. 83 Hedemann-Robinson, Enforcement of European Union Environmental Law, 348.

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“requirement of a proof of a causal link may cause problems in environmental-related Francovich damages claims, particularly in cases of monetary compensation in damages for an individual (or group of individuals) may, in many cases, simply be inappropriate as an adequate remedy for a serious environmental breach, and a remedy such as an injunction may be far more effective in practice.”84 Court jurisprudence on the EIA Directive85 seems to underline this claim. In Wells 41 the Court has held that a failure to comply with the EIA Directive may indeed trigger an individual’s “claim compensation for the harm suffered”.86 However, when applying this potential claim for compensation via the Francovich criteria in Leth, the limits of the Francovich criteria for environmental litigation became obvious: Scrutinizing the direct causal link between the breach in question and the damage sustained by the individuals, by reference to the nature of the breach the court held that the failure to carry out the assessment “does not lay down the substantive rules in relation to the balancing of the environmental effects with other factors or prohibit the completion of projects which are liable to have negative effects on the environment” and thus, “does not, in principle, by itself constitute the reason for the decrease in the value of a property”.87 When applying the Francovich criteria in an abstract manner to climate change cases, 42 these observations may well sustain. While there are many “rules of law” in EU law, including fundamental rights, that may satisfy the requirements of the first test, and a sufficiently serious breach may be established, direct causal links to an existing damage will be difficult, if not impossible to proof. aa) Infringing a rule of law intended to confer rights on individuals. The potential 43 rules for infringement in EU climate change litigation can be found either in secondary legislation or primary law, especially in fundamental rights law. (i) Secondary law: EU law of emission reduction. In secondary legislation, potential 44 rights of individuals with a connection to climate change litigation can stem from the Union measures which concern emission reduction, such as – Directive 2008/50/EC on ambient air quality and cleaner air for Europe,88 – Directive (EU) 2016/2284 on the reduction of national emissions of certain atmospheric pollutants89, – Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading within the Community90,

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Kingston/Heyvaert/Čavoški, European Environmental Law, 237. Directive 85/337/EEC (amended several times; now Directive 2014/52/EU). 86 ECJ Case C-201/02 The Queen, on the application of Delena Wells v Secretary of State for Transport, Local Government and the Regions [2004], ECLI:EU:C:2004:12, mn. 68 et seq. 87 Case C‐420/11, Jutta Leth v Republik Österreich, Land Niederösterreich [2013] ECLI:EU:C:2013:166 mn. 46; applying this ruling to the Air Quality Directive and the holding of the court in Janecek, it might be difficult for an applicant to prove, that the failure of the competent authorities to draw up an action plan directly caused the damage sustained; see likewise Vedder, Eur. L. Blog March 27th 2013. 88 Directive 2008/50/EC of the European Parliament and of the Council of 21 May 2008 on ambient air quality and cleaner air for Europe, OJ L 152, 11.6.2008, 1‐44. 89 Directive (EU) 2016/2284 of the European Parliament and of the Council of 14 December 2016 on the reduction of national emissions of certain atmospheric pollutants, amending Directive 2003/35/EC and repealing Directive 2001/81/EC (Text with EEA relevance), OJ L 344, 17.12.2016, 1‐31. 90 Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC, amended by Directive 2004/101/EC , Directive 2008/101/EC and Directive 2009/29/EC, OJ L 275/32. 85

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– Decision No 406/2009/EC on the effort of Member States to reduce their greenhouse gas emissions to meet the Community’s greenhouse gas emission reduction commitments up to 202091, – Regulation (EU) 2018/842 – Binding annual greenhouse gas emission reductions by Member States from 2021 to 2030 contributing to climate action to meet commitments under the Paris Agreement92, – Regulation (EU) No 525/2013 on a mechanism for monitoring and reporting greenhouse gas emissions and for reporting other information at national and Union level relevant to climate change93, – Directive 2009/31/EC on the geological storage of carbon dioxide94, – Regulation (EU) No 517/2014 on fluorinated greenhouse gases95, – Directive 98/70/EC relating to the quality of petrol and diesel fuels96, Directive 1999/ 94/EC of the European Parliament and of the Council of 13 December 1999 relating to the availability of consumer information on fuel economy and CO2 emissions in respect of the marketing of new passenger cars,97 Regulation (EC) No 443/2009 setting emission performance standards for new passenger cars as part of the Community’s integrated approach to reduce CO2 emissions from light-duty vehicles,98 Regulation No 510/2011 setting emission performance standards for new light commercial vehicles as part of the Union’s integrated approach to reduce CO2 emissions from light-duty vehicles.99 45 So far, the Court acknowledged that Directive 2008/50/EC, its predecessor Directive 96/62/EC, the predecessor of Directive 2016/2284/EC, Directive 2001/81/EC confer rights on individuals.100 In particular, the Court held in Janecek that Art. 7(3) of Directive 96/62/EC conferred such a right, as “the natural or legal persons directly concerned by a risk that the limit values or alert thresholds may be exceeded must be in a position to require the competent authorities to draw up an action plan where such a 91 Decision No 406/2009/EC of the European Parliament and of the Council of 23 April 2009 on the effort of Member States to reduce their greenhouse gas emissions to meet the Community’s greenhouse gas emission reduction commitments up to 2020 and Regulation (EU) 2018/842, OJ L 140/136. 92 Regulation (EU) 2018/842 – Binding annual greenhouse gas emission reductions by Member States from 2021 to 2030 contributing to climate action to meet commitments under the Paris Agreement and amending Regulation (EU) No 525/2013, OJ L 156, 19.6.2018, 26. 93 Regulation (EU) No 525/2013 of the European Parliament and of the Council on a mechanism for monitoring and reporting greenhouse gas emissions and for reporting other information at national and Union level relevant to climate change, OJ L 165/13. 94 Directive 2009/31/EC of the European Parliament and of the Council of 23 April 2009 on the geological storage of carbon dioxide and amending Council Directive 85/337/EEC, European Parliament and Council Directives 2000/60/EC, 2001/80/EC, 2004/35/EC, 2006/12/EC, 2008/1/EC and Regulation (EC) No 1013/2006, OJ L 140/114. 95 Regulation (EU) No 517/2014 of the European Parliament and of the Council of 16 April 2014 on fluorinated greenhouse gases and repealing Regulation (EC) No 842/2006, OJ L 150/195. 96 Directive 98/70/EC of the European Parliament and of the Council of 13 October 1998 relating to the quality of petrol and diesel fuels and amending Council Directive 93/12/EEC OJ L 350/58. 97 Directive 1999/94/EC of the European Parliament and of the Council of 13 December 1999 relating to the availability of consumer information on fuel economy and CO2 emissions in respect of the marketing of new passenger cars, OJ L 12/16. 98 Regulation (EC) No 443/2009 of the European Parliament and of the Council of 23 April 2009 setting emission performance standards for new passenger cars as part of the Community’s integrated approach to reduce CO2 emissions from light-duty vehicles, OJ L 140/1. 99 Regulation No 510/2011 of the European Parliament and of the Council of 11 May 2011 setting emission performance standards for new light commercial vehicles as part of the Union’s integrated approach to reduce CO2 emissions from light-duty vehicles, OJ L 145/1. 100 ECJ, Janecek v Bayern (fn. 68), mn. 39; ECJ Case C-404/13 The Queen on the application of ClientEarth v The Secretary of State for the Environment, Food and Rural Affairs, ECLI:EU:C:2014:2382 [2014], mn. 56.

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risk exists, if necessary by bringing an action before the competent courts.”101 Likewise, in Client Earth the ECJ held “that the natural or legal persons directly concerned by the limit values being exceeded after 1 January 2010 must be in a position to require the competent authorities, if necessary by bringing an action before the courts having jurisdiction, to establish an air quality plan which complies with the second subparagraph of Article 23(1) of Directive 2008/50, where a Member State has failed to secure compliance with the requirements of the second subparagraph of Article 13(1) of Directive 2008/50 and has not applied for a postponement of the deadline as provided for by Article 22 of the directive”.102 Concerning Directive 2001/81/EC (now Directive 2016/2284), in Stichting Natuur en Milieu the court held that “Article 6 of the NEC Directive grants rights to individuals directly concerned which can be relied upon before the national courts in order to claim that, during the transitional period from 27 November 2002 to 31 December 2010, the Member States should adopt or envisage, within the framework of national programmes, appropriate and coherent policies and measures capable of reducing, as a whole, emissions of the pollutants covered so as to comply with the national ceilings laid down in Annex I to that directive by the end of 2010 at the latest, and should make the programmes drawn up for those purposes available to the public and appropriate organisations by means of clear, comprehensible and easily accessible information.”103 While it is thereby established that these provisions grant individual rights, which 46 are enforceable in national courts, the reason for granting such was not the protection of the environment. Rather, the individual rights character stems from the fact that these provisions are designed to protect public health and their infringement could endanger human health.104 It should also be noted that in these cases the scope of the individual right is limited to the drafting of an action plan. With the introduction of this caveat, the Court is in line with previous case law, which requires that in order to confer individual rights, rules in the Directives need to be “unconditional and sufficiently precise”. A similar reasoning can be applied to the provisions of the other secondary measures 47 mentioned. If their content is designed to protect public health and their infringement could endanger human health, then the respective measure grants individual rights. However, the content of such a right needs to be limited to those elements which are “unconditional and sufficiently precise”. As most of the aims to be achieved stipulated by these Directive involve a discretionary element of Member States regarding the “how”, it is difficult to fulfil these criteria beyond a duty to do at least something meaningful, such as drafting an action plan. (ii) Primary law: individual rights. Individual rights granted by EU primary law have, 48 to our knowledge, so far not been subject to Member State non-contractual liability in the EU courts. They confer individual rights within their area of applicability. Individual rights in the Union stem from various sources, the most prominent one being the Charter of Fundamental Rights of the European Union (Charter)105 and, as a source for inspiration, from the European Convention for the Protection of Human Rights and Funda101

ECJ, Janecek v Bayern (fn. 68), mn. 39. ECJ, Janecek v Bayern (fn. 68), mn. 39, ECJ ClientEarth v The Secretary of State for the Environment et al, (fn. 100), mn. 56. 103 ECJ, Cases C-165 to 167/09 Stichting Natuur en Milieu and Others v College van Gedeputeerde Staten van Groningen and College van Gedeputeerde Staten van Zuid-Holland [2011] ECLI:EU: C:2011:348, mn. 104. 104 ECJ, Janecek v Bayern (fn. 68), mn. 38. 105 Charter of Fundamental Rights of the European Union, OJ C 326, 26.10.2012, 391‐407. 102

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mental Freedoms (ECHR).106 In Åklagaren v. Hans Åkerberg Fransson107 the Court has given extensive application in EU law to individual rights granted by the Charter. It established that individual rights protection provided by the Charter also extends to national provisions which do not directly transpose EU legislation into national law, but which “nonetheless remain in direct and close connection with European law by way of ensuring its effective application in the national legal system.”108 49 Within these provisions of EU law, no explicit right to a clean and quiet environment exists within European fundamental rights law.109 In the literature it has been stipulated that, however, some of the human rights protected at EU level might indirectly offer a certain degree of protection with regard to environmental matters.110 The major case law on a human right to environmental protection has been developed by the ECtHR, which identified the right to life, the right to respect for private and family life, right to a fair trial and have access to the court, the right to impart and receive information, the right to an effective remedy and the right to property as to be possibly affected by environmental factors.111 In addition, national courts such as in the Urgenda case have interpreted the provisions of the ECHR further in a way that a state duty exists to mitigate climate according to the required level by climate science.112 Extrapolating from this case to other jurisdictions is difficult as the judgment applied to the Dutch legal system only, which is also characterized by a specific monistic system.113 However, according to Article 52(3) of the Charter the rights in the Charter which correspond to rights guaranteed by the ECHR, shall be of the same meaning and scope as those laid down by the said Convention. Thus, the CJEU might be obliged to take into account Article 2 (right to life), Article 7 (right for private and family life), Article 11 (freedom of information) and Article 17 (right to property), the rights of children (Article 24) and the right to equal treatment (Article 20) of the Charter and grant at least the same level of protection in cases of environmental degradation as the ECtHR.114 However, the Court has made explicitly clear that such an automatic transfer of the ECtHR’s interpretation of the ECHR to EU fundamental rights would violate the principle of autonomous interpretation and disregard the differences between the EU’s and the ECHR’s legal order.115 The final interpretation of the scope and applicability of fundamental rights in the EU legal system rests with the ECJ, who also reserves the right to deviate from ECtHR’s jurisprudence. In Carvalho and Others v. Parliament and Council116, the EGC has had the possibility to determine if the Charter rights applied to climate change issues. However, as the General Court dismissed the claim for procedural reasons (see supra section II.), he could not judge on these rights in relation to the impact on climate change. An interpretation of these rights in favour of covering effects from climate change is likely, as the Court regularly interprets the scope of fundamental rights widely. This is particularly the case if claimants could argue for climate change being a threat to human health, as in those cases the Court has been more willing to accept individual rights protection. 106

Convention for the Protection of Human Rights and Fundamental Freedoms, ETS No. 005. ECJ C-617/10 Åklagaren v Hans Åkerberg Fransson [2013] ECLI:EU:C:2013:105. 108 Safjan, in Purnhagen/Rott (eds.), Varieties of European Economic Law and Regulation, 2014, 123 (143). 109 See inter alia Kingston/Heyvaert/Čavoški, European Environmental Law, 166. 110 This implying Johnston/Van der Marel, Cambridge Yearbook Eur. L. S. 2016, 176 (178, especially fn. 8). 111 Council of Europe, Manual on Human Rights and the Environment, 8. 112 Hoge Raad, 19/00135, Urgenda v The Netherlands [2019], ECLI:NL:HR:2019:2006. 113 See Purnhagen/van der Zeben/Schebesta/Biesbroek, Eur. L. Blog 9. January 2019. 114 Kingston/Heyvaert/Cavoski, European Environmental Law, 166. 115 ECJ, Opinion 2/3 of the Court, ECLI:EU:C:2014:2454. 116 General Court Case T-330/18 Carvalho and Others v Parliament and Council. 107

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bb) Sufficiently serious breach. The breach is sufficiently serious when “the Member State (…) manifestly and gravely disregarded the limits on its discretion.”117 EU Member States generally enjoy a wide margin of discretion in determining the policy instruments to reach these emission reduction goals stipulated in secondary legislation. Some of the secondary acts limit the discretion further by demanding specific policy tools. The Governance Regulation, for example, requires Member States to set up national energy and climate plans. Where such clear obligations are not followed, a sufficiently serious breach should be established. Where secondary legislation does not provide clear guidance as to how the discretion should be exercised, international law and fundamental rights law may serve as a demarcation line for the exercise of discretion. Where Member States gravely disregard international law and EU fundamental rights law in their exercise of discretion to implement their emission reduction duties, one could argue, they would sufficiently breach EU law. If Member States exercised their margin of discretion in a way that gravely disregards international law such an exercise may breach Art. 3(5) TEU, which obliges the EU to contribute “to the strict observance and the development of international law, including respect for the principles of the United Nations Charter.”118 The Court has furthermore annulled EU acts implementing international law in case of violation of human rights and fundamental freedoms.119 There is no reason why these obligations shall not translate into Member States implementing EU law in exercising their discretion, in case EU law leaves such discretion to Member States. When Member States exercise their discretion and, with their exercise, they violate human rights, fundamental rights or international law as manifest in the EU legal order, we argue that such an exercise may concern a sufficiently serious breach. This should be particularly true if the exercise of the discretion could endanger public health or human health, as in those cases the Court always provides public health and human health protection priority over other policy goals.120 Hence, if the exercise of the discretion to adopt measures to implement the emission reduction targets set at EU level violates EU fundamental rights, and in particular the right to life (Article 2 Charter) and the right to physical integrity (Article 3 Charter), a sufficiently serious breach may be observed. This could be the case, for example, if the measures applied are evidently insufficient to reach the emission reduction targets agreed at EU level. However, as the limits of the discretion are determined by EU law, a breach of international law obligations which do not translate into an EU law obligation cannot, in our opinion, determine a sufficiently serious breach. In this way, an obligation stemming from a violation of the ECtHR which is not granted by fundamental rights protection in the EU will not suffice to establish a sufficiently serious breach. The Court has expressed clearly that it reserves the last interpretation on the content of fundamental rights in the EU;121 the judgments of the ECtHR and the content of the ECHR are only advisory to the 117

ECJ, Brasserie v BRD (fn. 51), mn. 55‐56. ECJ, C-363/18 Organisation juive européenne, Vignoble Psagot Ltd v Ministre de l’Économie et des Finances [2019] ECLI:EU:C:2019:954, mn. 48. 119 ECJ, Cases C-402/05 P and C-415/05 P Yassin Abdullah Kadi and Al Barakaat International Foundation v Council of the European Union and Commission of the European Communities [2008] ECLI: EU:C:2008:461 (hereinafter: Kadi II), mn. 303, 371. See Kokott/Sobotta, Eur. J. Int’l. Law 2012, 1015 (1016). 120 See, for example, the Court’s reasoning in ECJ, Case C-183/95, Affish BV v Rijksdienst voor de Keuring van Vee an Vlees [1997] ECLI:EU:C:1997:373, mn. 43; approved by ECJ Case C-221/10 P, Artedogan GmbH v European Commission [20120] ECLI:EU:C:2012:216, mn. 99, where the Court required that, whenever a measure is intended to guarantee the protection of public health “it must take precedence over economic considerations.” 121 ECJ, Opinion 2/3 of the Court [2014], ECLI:EU:C:2014:2454. 118

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interpretation of EU fundamental rights by the Court. To be sure, this principle of autonomous interpretation works also vis-à-vis national Courts which interpret the content of the ECHR in a way that obliges their government to take specific measures to mitigate climate change, such as in the Dutch Urgenda case.122 If the implementation of international obligations by the EU breaches international law by, for example, not adopting sufficient measures to implement the emission reduction goals from the PA, this action is one of the EU and cannot be attributed to Member State’s discretionary exercise. Hence, such a breach may be sufficiently serious, but is not a breach of Member State obligations. If EU law deviates from international law, there is little reason why Member States shall have a duty according to EU law to correct such a deviation. This does not preclude any potentiale obligation arising from Art. 216(2) TFEU. 54 Hence, in climate change litigation, there is a good possibility that a sufficiently serious breach can be established. This is the case when the exercise of a Member State’s discretion to implement the policy tools to meet the emission reduction goals stipulated at EU level violate EU fundamental rights, in particular the right to life (Article 2 Charter) and the right to physical integrity (Article 3 Charter). cc) Direct causal link between the breach of the obligation resting on the state and the damage sustained by the injured parties. While the prerequisites and the exercise of the causal test rests with national courts, the Court has provided some minimum requirements for such a test. As a minimum requirement, the loss or damage suffered needs to comprise “any economically quantifiable detriments suffered [by the individual, addendum authors] as a result of a breach.”123 Damage done to the individual by not applying certain more effective climate change mitigation measures are hard to quantify, and even harder to quantify for individuals. In successful climate change litigation cases, the damage done usually referred to potential future damage for current and future generations and future infringement of the rights. The causal link established between breach and damage rested on statistic estimations, based on IPCC report data, which provided a certain likelihood that, if the respective variables would materialize, such losses or damages would also materialize. Such reference to statistics which describe the likelihood of effects of climate change on human health and the environment such as the one provided by the IPCC reports may, however, not provide sufficient proof of evidence for a causal link. The Court had decided in another case that the link needs to be “direct” and the provision of general statistics which contain too many dependent variables did not fulfil this requirement.124 56 Furthermore, the Court held that environmental effects alone may not satisfy justification of a direct causal link to the breach.125 When establishing this link, environmental effects always need to be balanced “with other factors.”126 Applying this case to climate change litigation, this would mean that the sole reference to the (negative) effects of climate change would, as itself, not suffice to establish a direct causal link, but that other legitimate interests resulting from potentially stricter mitigation measures would need to be taken into account. Such interests could be effects on global competition, national economies, individual rights to property etc. 55

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Hoge Raad, Urt. v. 20.12.2019, Rs. 19/00135, ECLI:NL:HR:2019:2006. Hedemann-Robinson, Enforcement of European Union Environmental Law, 346, see ECJ, Brasserie v BRD (fn. 51), mn. 90. 124 ECJ Case 197‐200, 243, 245 and 247/80 Ludwigshafener Walzmühle Erling KG and others v Council and Commission of the European Communities [1981], ECLI:EU:C:1981:311, mn. 51‐55. 125 ECJ Case C‐420/11, Jutta Leth v Republik Österreich, Land Niederösterreich [2013] ECLI:EU: C:2013:166 mn. 46. 126 Ibid. 123

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Without the possibility to use statistical evidence using a number of soft variables and 57 in the absence of a clearly and individually attributable damage it is not imaginable how a proof of a “direct causal link” will be possible. Due to these strict requirement of a “direct causal link” it is hence fiendishly difficult, if not impossible to apply the Francovich criteria to climate change litigation cases.

3. Does the nature of the breach of Union law require a different yardstick in climate law cases? While it is potentially impossible to establish the classical Francovich criteria to 58 climate change litigation, damage resulting from climate change may form a different “nature of the breach of Community law giving rise to the harm.”127 This prerequisite of non-contractual liability of EU Member States had been established by the Court to justify divergent criteria for Member State liability if the nature of the breach requires so. To our knowledge, this provision established by the Court was so far only applied in an environmental law case to provide interpretative guidance to when a direct causal link to the breach can be established.128 As we have already discussed, such an establishment of causation is often also the 59 major obstacle of success of climate change litigation cases.129 As has been noted in the literature, in environmental law causation has a fundament different function compared to individual litigation: It does not primarily aim at (individual) compensation, but rather at providing (dis-)incentives for actions or omissions.130 This was recognized by the Court in Janecek. When the obligation can be limited to a clearly identifiable action required by EU law from the Member State (such as in Janecek the drawing up of an action plan), this action has the goal of public health protection and its omission has the potential to endanger human health, then individuals have to have the possibility to rely on their rights to enforce this respective action. As this can also include bringing an action before competent courts, if “necessary” this may also include EU non-contractual member state liability law. The consequential reasoning in Janecek may be interpreted as an identification of a different nature of breach of EU law in these cases concerning public interest litigation in environmental matters, which also requires a test different from the classical three steps as developed by Francovich. If this were the case, EU member state liability would be established if the Janecek requirements are met (omission of the specific Member State endangers public health [not environment!] and the application of EU non-contractual member state liability is “necessary”). In essence, this test replaces a traditional causation test with a balancing exercise of hypothetically affected policies and rights,131 favouring – in line with settled case law – the protection of public and individual health in the balancing exercise. The final decision if this link between the Leth, Janecek and Francovich criteria would de jure establish EU non-contractual liability in climate change litigation cases rests with the Court. The Court has also held that the applicability of EU non-contractual member state 60 liability depends upon the doctrinal prerequisite of a general principle of liability common to all Member States that covers the specific liability content at stake (See supra section V 1. a)). Currently, only The Netherlands have successfully adopted climate change litigation. The success of this case also largely depended on the specifics of the 127

ECJ Francovich v Italian Republic (fn. 48), mn. 38. Case C‐420/11, Leth v Republik Österreich (fn. 125) mn. 46. 129 Faure/Nollkaemper, Stanford J. Intl. Law 2008, 123 (157 et seq.); Saurer/Purnhagen, ZUR 2016, 16 (22). 130 Schäfer/Ott, Lehrbuch der Ökonomischen Analyse des Zivilrechts, 4th ed., 2005, 359 et seq. 131 As the Court has established in a similar case ECJ Case C‐420/11, Jutta Leth v Republik Österreich, Land Niederösterreich [2013] ECLI:EU:C:2013:166 mn. 46. 128

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Dutch legal system such as an extensive provision to allow for public interest litigation and the monistic legal system (See supra section V.2.c.aa) (ii)). In other countries such as Germany, climate change litigation has not yet achieved comparable success.132 Hence, in the current state of legal evolution, a general principle of climate change liability common to Member States liability laws does not exist. As this is the foundational principle for the applicability and existence of EU non-contractual Member State liability, it will ultimately be hard for climate change litigation to succeed using this liability route.

VI. Conclusion 61

The EU pursues ambitious greenhouse gas reduction goals. Until 2030 the emissions in the EU Member States combined shall be cut by 40 % compared to 1990 levels. The EU Member States are responsible for implementation of the EU ETS and for fulfilling the differentiated national obligations in the non-ETS sector under the Effort Sharing Regulation. The practical success depends upon effective enforcement mechanisms. In the enforcement system of EU climate change law, liability mechanisms play an important role. First, the Effort Sharing Regulation establishes a mechanism of financial sanctions for the non-ETS sector that apply for EU Member States that fail to reach their national reduction obligations. These EU Member States will be obliged to buy emission allowances from the EU Member States that have stayed with the assigned emission voluminal. A second enforcement mechanism that includes financial sanctions is the infringement procedure according to Articles 258 to 260 TFEU. The EU Commission has already announced the intent to deploy the infringement procedure in the climate change sector which may lead to ECJ judgments imposing lump sum and penalty payments upon particular EU Member States. A potential third liability mechanism might emerge over time under the judicial doctrine of non-contractual state liability that has been first established by the ECJ in the Francovich judgment of 1990. The applicability of the Francovich doctrine depends upon the doctrinal prerequisite of a general principle of liability common to all Member States that covers the specific liability content at stake. However, in the current state of legal evolution such a general principle of liability common to all Member States does not yet exist. 132

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PART 4 CLIMATE CHANGE LITIGATION – NATIONAL REPORTS K. Climate change litigation in the United States Bibliography: Adelan/Glicksman, Presidential and Judicial Politics in Environmental Litigation, 50 Ariz. St. L.J. 3 (2018); American Law Institute [ALI], A Concise Restatement of Torts, 3rd ed., American Law Institute Publishers 2013; Blumm, Two Wrongs? Correcting Professor Lazarus’s Misunderstanding of the Public Trust Doctrine, 46 Envtl. L. 481, 482 (2016); Butti, The Tortuous Road to Liability: A Critical Survey on Climate Change Litigation in Europe and North America, 11 Climate L. Rep. 32 (Winter 2011); Castillo, Climate Change & the Public Trust Doctrine: An Analysis of Atmospheric Trust Litigation, 6 San Diego J. Climate & Energy L. 221, 223 (2015); Flynn, Climate of Confusion: Climate Change Litigation in the Wake of American Electric Power v. Connecticut, 29 Ga. St. L. Rev. 3 (2013); Klass, Modern Public Trust Principles: Recognizing Rights and Integrating Standards, 82 Minn. L. Rev. 1 (2012); Kolbert, The Sixth Extinction: An Unnatural History, Henry Holt & Co., 2014; Kysar, What Climate Change Can Do About Tort Law, 42 Env. L. Rep. 10739 (2012); Lazarus, Judicial Missteps, Legislative Dysfunction, and the Public Trust Doctrine: Can Two Wrongs Make It Right?, 45 Envtl. L. 1139 (2015); Levy, Juliana and The Political Generativity of Climate Litigation, 43 Harv. Env. L. Rev. 479 (2019); Markel/Ruhl, An Empirical Assessment of Climate Change in the Courts: A New Jurisprudence or Business as Usual?, 64 Fla. L. Rev. 15 (2012); McGarity/Shapiro/Sokol/Flores, Climate Justice: State Courts and the Fight for Equity, Center for Progressive Regulation, http://progressivereform.org/articles/Climate-Justice-FINAL-011219.pdf; Peel/Osofsky, Sue to Adapt?, 99 Minn. L. Rev. 2177 (2015); Tatel, The Administrative Process and the Rule of Environmental Law, 34 Harv. Env. L. Rev. 1 z92010); Weaver/Kysar, Courting Disaster: Climate Change and the Adjudication of Catastrophe, 93 Notre Dame L. Rev. 295 (2017).

Contents I. Introduction ..................................................................................................... II. Jurisdictional issues ........................................................................................ 1. Standing ........................................................................................................ 2. Personal jurisdiction .................................................................................. 3. Subject matter jurisdiction ....................................................................... III. Public law litigation........................................................................................ 1. Litigation under the Clean Air Act ........................................................ 2. Litigation over disclosure of climate impacts....................................... 3. Adaptation issues........................................................................................ 4. Non-statutory claims ................................................................................. IV. Tort liability ..................................................................................................... 1. Nuisance law and climate change........................................................... 2. Causation issues .......................................................................................... 3. Litigation prospects .................................................................................... V. Conclusion........................................................................................................

1 5 6 15 18 25 25 37 41 45 49 50 52 55 56

I. Introduction Climate litigation in the United States is highly active. The Sabin Center’s compre- 1 hensive database on U.S. climate litigation contains over a thousand entries.1 This number is larger than the number of legal disputes because of duplications caused by 1

See http://climatecasechart.com/us-climate-change-litigation/.

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multiple filings involving the same government action and separately counting appeals from trial court proceedings. A fair count would probably be seven to eight hundred litigated matters, the large majority in federal court.2 This is still an impressive amount of litigation. 2 The most fruitful area of U.S. climate change litigation has involved judicial review of actions by administrative agencies. This category accounts for roughly three-quarters of the cases on the database. U.S. law makes it relatively easy for plaintiffs to access the courts to challenge agency actions and provides several feasible legal theories for overturning those actions. For that reason, much of this chapter will focus on litigation over agency actions. Plaintiffs have also attempted to sue fossil fuel companies for compensation. Although those lawsuits have encountered difficulties, plaintiffs have responded by reformulating their litigation strategies. There are also a scattering of other matters such as state law claims, claims that companies failed to disclose climate risks to investors or consumers, and cases dealing with climate protests or involving individual scientists. Those cases will not be discussed in this chapter. 3 It is fair to say that climate change litigation in the United States, like the entire issue of climate policy, has been politically polarized. In the larger policy arena, this polarization is epitomized by the contrast between the climate stances of Presidents Obama and Trump. Those divisions reflect not just different views of climate change, but different views about government regulation generally and about the role of the courts in addressing major societal issues. Because of the heated battles between pro- and anti-regulatory advocates, it remains as true today as in 2012 that a “siege-like battle… has led to an increasingly robust and complex litigation landscape but with mixed results for both sides.”3 At least in the federal trial courts, there is some evidence that outcomes in environmental litigation are strongly influenced by the political party of the president who appointed the judge, a proxy for the judge’s political ideology.4 The study indicated, however, that this was much less true in the federal appeals courts. Hopefully this remains true even in the more polarized political atmosphere of the Trump era. 4 The chapter will begin by addressing jurisdictional issues involved in climate change litigation. It will then turn to litigation against government agencies, generally based on claims that the agency has violated an environmental statute or has exceeded its authority under such a statute. Finally, the chapter will discuss claims against emitting industries.

II. Jurisdictional issues 5

To obtain a ruling on the merits, the plaintiffs in climate litigation must first surmount several jurisdictional hurdles by proving that they have standing and that the court has subject matter and personal jurisdiction over the case. These jurisdictional hurdles can pose considerable challenges in climate change cases, despite arguments by some scholars that judges should not allow such technicalities to prevent them from addressing an issue of such serious import for humanity.5 2 It is possible to obtain a count using the search function on the data base. Restricting the count to cases filed through 2010 produces 294 results, about 50 % higher than the number for that period reported by Markell and Ruhl after filtering the database results. Markell, Fla. L. Rev., p. 19. If we apply the same discount to the database result for cases through 2019, the number would be around 725. 3 Id. at 15. 4 Adelman/Glicksman, Arizona St. L.J., 8–9. 5 Weaver and Kysar, Notre Dame L. Rev., p. 356.

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1. Standing For a party seeking judicial review, standing is a critical threshold issue. Under the Supreme Court doctrine that has evolved over the past half century, Article III of the U.S. Constitution requires that a plaintiff prove three elements in order to establish standing.6 First, the plaintiff must show “injury in fact” – that is, that the plaintiff has suffered or will suffer some kind of actual, concrete injury, as opposed to simply a policy disagreement with the government. Second, the plaintiff must show that this injury is “fairly traceable” to the defendant’s conduct. This is something like the proximate cause requirement in torts. For instance, some courts have held that citizens living on a river lack standing to sue over discharge that took place far upstream, because the causal connection is too attenuated. Finally, the plaintiff must show that its injury could be remedied, at least in part, by the court. Under this doctrine, a plaintiff seeking to sue to prevent carbon emissions faces some significant challenges. The emissions in question will probably make little or no measurable difference in global temperatures by themselves, and any impact that does exist may be decades in the future. Is this an injury in fact? Also, the harm occurs only because of the combined effect of the emissions at issue with those of thousands or even millions of other emitters. Is the harm “fairly traceable” to the defendant? And even if the court prevents the emissions in question, will that result in any detectable improvement in the plaintiff’s future welfare, given the existence of other major carbon sources around the world? The Court confronted this standing issue in Massachusetts v. EPA,7 a suit brought by states, local governments, and environmental organizations. The plaintiffs sought review of EPA’s denial of their petition for EPA to regulate greenhouse gas emissions from motor vehicles under the Clean Air Act. Before applying the three-part test for standing, Justice Stevens made several preliminary points in his opinion for the Court. The Court rejected the claim that standing cannot be based on widespread harms. Moreover, the Court stressed that the test for standing is easier to meet where a procedural right is involved, in this case, the right to petition for a regulation. In such cases, standing requires only the existence of a genuine possibility that the outcome might be affected by correction of the procedural error. Finally, because some of the plaintiffs were state governments, the Court suggested that their standing claim should be treated with particular generosity because of the state governments’ quasi-sovereign interests. Of these general assertions about standing law, the point about the standing of state governments seemed the most novel, though it did have some historical antecedents.8 The Court then turned to the three-part standing test. Its analysis focused on the lead plaintiff, the state of Massachusetts. The first element is injury in fact. As to this element, the Court called the harms resulting from climate serious and well recognized. The Court then referred to a research report, which EPA itself had cited, for a list of possible impacts of climate change, including melting of glaciers, loss of snow-cover, and rising sea levels. These impacts were specifically significant for Massachusetts as a 6 See Friends of the Earth, Inc. v. Laidlaw Env. Serv. (TOC), Inc.; Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992); Sierra Club v. Morton, 405 U.S. 727 (1972). 7 549 U.S. 497 (2007). 8 It should be noted that some lower courts have recognized some distinctive types of injuries relating to state governments in environmental cases. See, e.g., National Ass’n of Clean Air Agencies v. EPA, 489 F.3d 1221, 1227–1228 (D.C. Cir. 2007) (state agencies have standing when a new EPA rule would allow increased pollution from some sources and thereby make it more difficult for them to establish state implementation plans; court cites Massachusetts v. EPA as well as earlier circuit authority).

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coastal state, where rising sea levels would result in progressive losses of land area and would require an estimated hundreds of billions of dollars in remedial action such as the construction of sea walls. As to causation, despite the Bush Administration’s general reluctance to take action on climate change, EPA did not contend that greenhouse gas emissions cause climate change or that climate change would be harmful. EPA did contend, however, that the particular government action that the plaintiffs sought would not have a significant impact, because automobiles are only one source of greenhouse gases and because the United States as a whole accounts for only a portion of these gases. The Court held that in the face of such large harms, incremental steps toward reducing the harm were sufficient to form a basis for standing. Moreover, this particular first step would be far from insignificant because U.S. vehicle emissions taken alone would actually rank as substantial in terms of global emissions. For similar reasons, the Court was untroubled by the remedial issue. Although the remedy requested by the plaintiffs – emissions regulations for new U.S. vehicles – would not solve the problem of climate change, such regulations would help slow global warming. As the Court noted, the government had strongly supported voluntary efforts to reduce greenhouse gases, and it presumably believed that such voluntary actions had sufficient impact to be worthwhile. The four most conservative members of the Court dissented. It is worth considering the dissent in detail because it raised concerns that still trouble lower courts. Moreover, because of changes in the make-up of the Supreme Court, the arguments raised by the dissenters are likely to receive renewed attention in future litigation. The dissent rejected the view that states are entitled to special solicitude in terms of their standing claims. The dissent challenged the majority’s assertion of precedential support for this idea. Additionally, the dissent could find no concrete injury in fact to the state of Massachusetts. The dissent viewed the concept of global warming as inconsistent with the requirement that particularized harm to the plaintiff be shown, since climate change affects the entire human race. The dissenters could not find any evidence in the record of actual harm to the state from twentieth-century climate change. Although harm over the next hundred years was suggested by the evidence, that harm was not sufficiently certain or impending. Moreover, the dissent argued, the Court had misapplied the causation requirement. The emissions involved in the case were only a small fraction of global emissions. Furthermore, according to the dissent, predicting future climate change involves a complex web of economic and physical factors, making it impossible to show how the specific harm alleged by the state was tied to a possible small change in global emissions. For the same reason, it was problematic to assume that the regulations sought by the plaintiffs would actually have any discernible impact on the harm that they were seeking to redress. The Court did nothing to clarify the issue of climate standing in American Electric Power v. Connecticut (AEP),9 which involved a lawsuit by several states, New York City, and some non-profit land trusts against five major electric power companies. The plaintiffs contended that the power companies were committing a public nuisance with their unrestricted use of fossil fuels. Lower court judges had divided about whether suits of this type were even within the jurisdiction of the federal courts. Some district judges said the suits were nonjusticiable “political questions,” and the defendants also argued that the injury to the plaintiffs was too diffuse, speculative, and indirect to give them standing to sue. The Supreme Court split evenly on these issues, resulting in no 9

564 U.S. 410 (2011).

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opinions on the subject of jurisdiction. The even split occurred because Justice Sotomayor had participated in the lower court consideration of the case before she joined the Supreme Court, so she did not participate at the Supreme Court level. Lower courts have continued to have difficulty dealing with issues of climate 14 standing, as reflected in Washington Environmental Council v. Bellon.10 The plaintiffs sought to compel a state regulatory agency to regulate greenhouse emissions from five oil refineries under a provision requiring the use of reasonably available control technology for some existing air pollution sources. The collective annual emissions of these refineries came to about six million tons. The court assumed for purposes of decision that the plaintiffs would suffer injury-in-fact from climate change, but it concluded that they had failed to show the required causal connection between the refineries and their injuries. The court distinguished Massachusetts v. EPA on the ground that the plaintiffs in that case were state agencies, which were entitled to greater judicial solicitude, and more importantly because it considered the much smaller amount of emissions from the five refineries not to constitute a meaningful contribution to global emissions, whereas vehicle emissions from the United States as a whole were large enough to register globally.

2. Personal jurisdiction The need to establish personal jurisdiction over the defendants is another potential 15 barrier to climate change litigation involving emission sources outside of the jurisdiction in which the suit is brought. Although not a climate case, Pakootas v Teck Cominco11 illustrates the issue of jurisdiction over external sources of environmental harm. In Pakootas, an Indian tribe in the state of Washington brought a claim against a Canadian company for discharges of toxic chemicals into the Columbia River from the company’s smelting operation in Canada. One issue before the court was whether an American court had personal jurisdiction over the mining company. The court applied a threepart test: (1) whether the company committed an intentional act, (2) whether it expressly aimed that act at the forum state, and (3) whether the defendant knew that the harm in question was likely to be suffered in that state.12 Given that the company was deliberately dumping waste containing the toxic chemicals into the Columbia River “just miles” from the U.S. border, the court concluded that these elements were satisfied. As the court explained, rivers are like conveyor belts, and the company would have been buried in waste if it had not made use of this natural transport system to convey the waste to Washington State. It is by no means clear whether this test would allow a U.S. state to exercise 16 jurisdiction over a carbon emitter outside its borders. Admittedly, the emissions will inevitably enter the atmosphere and affects the U.S. state as well as the rest of the globe. Still, the causal link is far more diffuse than the situation described in the Pakootas case. In Pakootas, the court concluded that “there would be no fair play and no substantial justice” if the defendant could avoid suit “in the place where it deliberately sent its waste.”13 Carbon emissions, however, blanket the globe, so a ruling in favour of jurisdiction in one forum would essentially apply to every court in the world. This is a leap beyond what the U.S. courts have so far been willing to embrace.

732 F.2d 1131 (9th Cir. 2013), rehearing in banc denied, 741 F.3d 1075 (2014). 905 F3d 565 (9th Cir. 2018). 12 This test is derived from Calder v. Jones, 465 U.S. 783 (1980). 13 Id. at 578. 10 11

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It should be noted that jurisdiction might not exist even if a defendant, such as a major oil company, did a substantial amount of business in the forum state. The U.S. Supreme Court has held that a corporation may be sued only for actions linked with the forum state (as in Pakootas) or in a state where it is “essentially at home,” primarily meaning that it is either incorporated or has its principal place of business there.14 Thus, it would seem that a U.S. emitter could not be sued for its carbon emissions in a state court unless the Pakootas standard is met, or the emitter is incorporated or headquartered in the forum state.

3. Subject matter jurisdiction Under Article III of the U.S. Constitution, the jurisdiction of the federal courts in the United States is limits to specific types of cases. Most important for present purposes are cases arising under federal laws. (Cases can also be brought in federal court if the plaintiff is from a different state than each of the defendants, but this situation has not been typical of cases against industry). The application of the jurisdictional rules to certain types of climate change cases is now controversial and relates to whether the nature of climate litigation is inherently federal. A number of plaintiffs have brought lawsuits alleging that large-scale carbon emitters were committing a public nuisance that was actionable under the federal common law of nuisance. This theory of tort liability will be discussed later in this chapter. For present purposes, the key point is that tort law is normally a matter for state law, but the Supreme Court previously recognized a federal, non-statutory counterpart relating to interstate pollution. That federal common law doctrine had been recognized in several cases dealing with interstate water pollution, but the Supreme Court later held that this body of federal law evaporated following the passage of the Clean Water Act.15 Similarly, the Supreme Court held in AEP that the federal common law of nuisance regarding climate change is displaced by the Clean Air Act’s grant of jurisdiction to EPA to regulate greenhouse gases. According to the AEP opinion, Massachusetts v. EPA determined that greenhouse gases can be regulated by air pollutants under the statute, and the Court found it equally clear that the statute covered emissions from power plants. Thus, the Supreme Court seemed to have committed itself to recognizing EPA authority over carbon emissions from stationary sources, although that had not been an issue in Massachusetts v. EPA. 19 The AEP court left open the possibility that lawsuits could still be brought under state nuisance law. Cases involving state-law claims rather than federal-law claims are generally within the jurisdiction of the federal courts only if all of the defendants are from different states than the plaintiffs. Because of the increasingly conservative makeup of the federal courts, someone bringing suit against carbon emitters or fossil fuel companies would much prefer to litigate in state court. However, at present there is a dispute about whether the federal courts do after all have jurisdiction over the claims. The argument for federal jurisdiction is based on the existence of a pervasive scheme of federal regulation for emissions into the atmosphere and the inherently transboundary nature of the climate harms. The federal trial courts are divided on this issue, and it remains to be seen how the federal appeals courts will rule. If the cases are within the subject matter jurisdiction of the federal courts, defendants will naturally want to move all of the litigation there in order to obtain a more favourable forum. 20 At one level, the issue involves very technical doctrines that are mostly of interest to specialists in federal jurisdiction. At another level, however, it involves fundamental 18

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See BNSF Railway Co. v. Tyrrell, 137 S. Ct. 1549 (2017). Flynn, Georgia St. L. Rev., 829–833.

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disagreements about the role of states and of courts generally in addressing climate change. These concerns are particularly evident in the court’s opinion in City of Oakland v. BP P.L.C.,16 in which the judge held that the case properly belonged in federal court and then dismissed the case on the merits. The cities of Oakland and San Francisco sued the major oil companies operating in the United States for damages in state court, claiming that they were responsible for climate change that was forcing the city to engage in costly efforts at adaptation. The defendants then removed the case to federal court. Generally, a state can be removed to federal court in a situation like this only if the case is based on federal law. The city, however, based its claim on state law, which normally would preclude removing the case to federal court. The defendants argued, however, that the case could be removed to federal court under an exception that allows removal when a claim invades an area of exclusive federal authority. The theory behind this exception is that the plaintiff’s cause of action must come from federal after all, since Congress intended federal law to provide the exclusive cause of action. The judge set the tone for his analysis with his description of the city’s claims: “The scope of plaintiffs’ theory is breath-taking. It would reach the sale of fossil fuels anywhere in the world, including all past and otherwise lawful sales, where the seller knew that the combustion of fossil fuels contributed to the phenomenon of global warming. While these actions are brought against the first, second, fourth, sixth and ninth largest producers of fossil fuels, anyone who supplied fossil fuels with knowledge of the problem would be liable.”17 Given this description, it is no surprise to learn that the judge concluded that the case should not be allowed to proceed. The Court held that only the federal common law could apply, given the nationwide and international nature of the problem. Federal common law, in turn, was displaced by the Clean Air Act to the extent it involved emissions caused by the defendants within the United States, and by the exclusive power of the federal government over foreign affairs to the extent it was based on emissions that took place outside the United States. The judge’s reasoning was based much more on policy than on legal doctrine: “The dangers raised in the complaints are very real. But those dangers are worldwide. Their causes are worldwide. The benefits of fossil fuels are worldwide. The problem deserves a solution on a more vast scale than can be supplied by a district judge or jury in a public nuisance case. While it remains true that our federal courts have authority to fashion common law remedies for claims based on global warming, courts must also respect and defer to the other co-equal branches of government when the problem at hand clearly deserves a solution best addressed by those branches.”18 In Mayor and City Council of Baltimore v. BP P.L.C.,19 however, a different judge stayed closer to establish legal doctrine and rejected the effort to move the case to federal court. The court concluded that at most the oil companies had a possible defence to the case based on federal law, which they could raise in state court. But the “complete preemption” doctrine did not apply because there was no evidence that Congress meant federal law to be the exclusive remedy in air pollution cases. Indeed, the court pointed out, a provision in the Clean Air Act explicitly preserved all existing remedies for air pollution under other statutes and the common law. The difference in tone between this case and the City of Oakland case is striking. The judge in the Baltimore case made no 16

325 F.Supp. 3d 1017 (N, Dist. Cal. 2018). Id. at 1022. 18 Id. at 1028–1029. 19 388 F. Supp. 3d 538 (Dist. Maryland 2019). 17

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grand pronouncements about climate change or about the separation of powers, instead patiently analysing each of the oil companies’ legal arguments based on precedent. The federal courts of appeals seem to be taking the more conventional approach, applying traditional legal rules that return the cases to state court.20

III. Public law litigation 1. Litigation under the Clean Air Act One of the most important areas of U.S. climate litigation has related to actions by administrative agencies bearing on carbon emissions. Because the U.S. Congress has not passed legislation dealing with climate change, agency action has to be based on some existing statute. In the aftermath of Massachusetts v. EPA, the central focus was the use of the Clean Air Act to regulate carbon emissions. 26 A very brief introduction to review of agency actions is a necessary predicate to understanding this area of climate litigation. The Administrative Procedure Act creates a general presumption that all final administrative actions are judicially reviewable by any person who is injured by the agency action. The Supreme Court interprets the statutory injury requirement to require only that the plaintiff be “within the zone of interests” protected by the statute.21 Of course, as discussed earlier, the plaintiff must also satisfy the constitutional requirements for standing. When an agency action is challenged for being inconsistent with a statute, the courts apply what’s called the Chevron test.22 Under this test, the courts are required to uphold any agency’s interpretation of the statute if that interpretation is reasonable, even if it is not the interpretation that the court would have chosen. Factual and technical judgments by an agency are also subject to judicial review. Under what is misleadingly called the “arbitrary and capricious” test, the court will uphold an agency action only if it gives a reasoned explanation for why it reached its conclusion, based on the record of evidence compiled by the agency.23 Generally affected parties have the right to comment on a proposed agency action and provide additional evidence. The agency must respond to significant arguments and evidence presented by those parties, providing an explanation of why it did or did not find them credible. As one prominent judge has explained, “Although an explanation that takes account just of cherry-picked fragments of the record may explain why the agency would have taken the action it did if the record consisted only of those fragments, it tell us little about the agency’s choice based on the record as a whole.”24 27 The Supreme Court confronted the issue of EPA’s regulatory authority in Massachusetts v. EPA.25 As discussed earlier in connection with standing doctrine, the plaintiffs petitioned EPA to regulate greenhouse gases under section 202(a)(1) of the Clean Air Act, which applies to air pollution from new vehicles.26 Section 202(a)(1) requires the Administrator of EPA to issue emissions standards for new motor vehicles regarding air 25

20 Mayor & City Council of Baltimore v. BP P.L.C., 952 F.3d 452 (4th Cir. 2020); City. of San Mateo v. Chevron Corp., 960 F.3d 586, 593 (9th Cir. 2020) (reversing the Oakland ruling that is described in the text). 21 See Bennett v. Spear, 520 U.S. 154 (1997). 22 Chevron, U.S.A. Inc. v. Natural Resources Defense Council, 467 U.S. 837 (1984). 23 See Motor Vehicle Mfg. Ass’n v. State Farm Mutual Auto. Ins., 463 U.S. 20 (1983); Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402 (1971). 24 Tatel, Harv. Env. L. Rev., 6. 25 549 U.S. 497 (2007). 26 42 U.S.C. § 7521(a)(1).

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pollutants that “in his judgment cause, or contribute to, air pollution which may reasonably be anticipated to endanger public health or welfare.”27 This petition set the stage for what turned out to be a crucial Supreme Court ruling on greenhouse gas regulation. The Court concluded that the statute plainly covered greenhouse gases. The statute contains a definition of “air pollutant” that includes any substance introduced into the air, language that certainly includes greenhouse gases. The court remarked that “[o]n its face, the definition embraces all airborne compounds of whatever stripe, and underscores that intent through the repeated use of the word ‘any.’ ” Moreover, the Court said, “[w]hile the Congress that drafted § 202(a)(2) might not have appreciated the possibility that burning fossil fuels could lead to global warming, they did understand without regulatory flexibility, changing circumstances and scientific developments would soon render the Clean Air Act obsolete.” In the Court’s view, the “broad language of § 202(a)(1) reflects an intentional effort to confer the flexibility necessary to forestall such obsolescence.” Given the strongly pro-environmental tenor of the times, the Court was surely right that the 1970 Congress would have endorsed using the statute to address climate change. On remand from the Supreme Court, to no one’s surprise, EPA made a formal finding that greenhouse gas emissions endanger human health or welfare. Challenges to EPA’s action were addressed in Coalition for Responsible Regulation, Inc. v. EPA.28 The challengers raised several issues about the EPA finding. First, they argued that EPA, in effect, had delegated its judgment to other bodies such as the IPCC and the National Research Council by relying on their scientific assessments. Clearly, the statute requires EPA to form its own judgment rather than blindly adopting the views of some other body. But EPA cited a large volume of evidence, not just the ultimate conclusions of these expert bodies, so this argument was something of a stretch. Indeed, the court rejected the argument as “little more than a semantic trick.” In reality, the court said, EPA had merely made normal use of the existing scientific literature, and carefully evaluated the quality of these sources before relying on them. Second, the challengers argued that the scientific evidence in the record did not support the finding of endangerment. The court carefully recounted the basis for this finding in the scientific evidence, concluding that there was substantial evidence that climate change endangers health and welfare. Industry argued, however, that there was too much uncertainty to support EPA’s conclusion. In rejecting the industry argument, the court stressed that the statute is precautionary in nature and that to wait for certainty would block preventive regulation. In the court’s view, the statute “requires a precautionary, forward-looking scientific judgment,” so as “to prevent reasonably anticipated endangerment from maturing into concrete harm.” It is worth noting that this approach resonates with the Precautionary Principle found in international environmental law, though the court did not say so. Two other arguments that were made before the court are also worth mentioning. Some of the parties commenting on the rule argued that EPA had improperly based its endangerment finding on possible harm to foreign populations. EPA made it clear, however, that although it considered the global effects of greenhouse gases, it did so only in the course of determining potential domestic harm. EPA thus dodged the issue of whether it could have considered harm to human health or welfare outside the United States if it had wanted to do so. Another argument concerned the relevant time period for 27

Id. Coalition for Responsible Regulation, Inc. v. EPA, 684 F.3d 102 (D.C. Cir. 2012). The Supreme Court and reversed in part on another issue in Utility Air Regulatory Group v. EPA, 134 S.Ct. 2427 (2014). 28

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assessing danger. Time scale is clearly a critical issue in assessing the impacts of climate change. Rejecting arguments for focusing only on current impacts, EPA’s analysis was based on the next few decades, in some cases extending up to the end of the century. The Supreme Court declined to review the endangerment finding. The Trump Administration has been under some pressure from the conservatives to reopen the endangerment finding, but as yet, it has declined to do so. Thus, the endangerment finding stands intact. Once it had decided to make a finding of endangerment, EPA was then faced with the question of how to go about regulating greenhouse gases. This was a relatively straightforward issue in terms of vehicle emissions. The statute required EPA to impose standards for emissions from new motor vehicles once it had found that climate change endangered human health or welfare, and EPA proceeded to do so without any huge difficulty. At the same time that issued standards for new vehicles, EPA also issued rules for new stationary sources such as factories and power plants. These rules were based on a portion of the Clean Air Act that was initially designed for quite another purpose: maintaining air quality in areas that were relatively pristine rather than letting it decline to the level of the national air quality standards. As it turned out, however, all areas of the country were eventually found to be cleaner than the national standards for at least one pollutant. Thus, the provisions now apply nationally. They require the use of the best available control technology (BACT). In applying this provision, EPA was faced with two major coverage issues. What facilities are covered is controlled by another provision that defines the “major sources” that must comply with BACT.29 This provision defines a source as major if it emits or has the potential to emit a specified quantity of “any pollutant” (either 100 tons per year or 250 tons, depending on the nature of the facility). For facilities that were already covered by the BACT requirement due to their emissions of conventional pollutants like SO2, the statute made it clear that BACT also had to be used to reduce greenhouse gases. But EPA faced a difficulty regarding facilities that did not emit enough conventional pollutants to require BACT. While 250 tons per year is quite a lot of most conventional pollutants, there are a huge number of relatively small sources that emit this amount of CO2. EPA believed that it would be completely impractical to apply the BACT requirement to all of those facilities. It therefore adopted a “tailoring rule,” which limited coverage of BACT to facilities that emitted much larger amounts of greenhouse gases (at least 75,000 tons per year). In a 5–4 decision, the Supreme Court reversed EPA’s triggering and tailoring rules in Utility Air Regulatory Group v. EPA [UARG].30 In UARG, the Court concluded that the agency should have realized its broad definition of major facilities was completely untenable. The term “air pollutant” would normally encompass greenhouse gases, per Massachusetts v. EPA, but in this case that interpretation would make no sense. Even EPA agreed that interpreting the statute to cover thousands of additional sources), would be absurd. But EPA lacked the authority to rewrite the numerical limits provided by the legislature. The Court agreed, however, that EPA was correct in another respect: once a source is classified as “major” because of its emission of conventional pollutants, it must control greenhouse gases. This decision makes it clear that the Supreme Court is not prepared to give agencies unlimited discretion to deal with climate change. As the Trump Administration’s regulatory rollbacks are finalized in agencies, they will undoubtedly be subject to litigation. At the present time, none of the major rollbacks have been the subject of judicial rulings. The courts generally have not been 29 30

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very receptive to the Administration’s arguments in less Clean Air Act and energy cases involving less weighty issues.31

2. Litigation over disclosure of climate impacts. Another fertile source of climate litigation has been the National Environmental Policy Act (NEPA). As of 2012, NEPA gave rise to one-sixth of all U.S. climate litigation,32 which is roughly consistent with the numbers currently on the Sabin Center website. The most significant provision of NEPA is undoubtedly section 102(2)(c).33 The crucial language of this provision requires federal agencies to include in every “recommendation or report” on “major Federal actions significantly affecting the quality of the human environment” a detailed statement covering: (i) the action’s environmental impact, (ii) any unavoidable adverse environmental effects of the action, (iii) alternatives to the proposed action. The EIS also must “accompany the proposal through the existing agency review processes.” In essence, the statute requires the agency to prepare a detailed explanation of the environmental consequences of its proposed actions and to make that report available to higher-level agency officials, other agencies, and the public. The goal is to ensure that the relevant agency and the general public are fully informed of the potential environmental impacts of the project and the extent to which they can be limited. The Supreme Court has indicated that once an agency discloses the relevant information, the results of the EIS do not tie NEPA’s hands in making the actual decision.34 The key question for our purposes is how climate change factors into NEPA. The leading case is Center for Biological Diversity v. Nat’l Highway Traffic Safety Admin.35 At issue was a Bush Administration rule setting fuel efficiency standards for small trucks and SUVs. The court faulted the agency for failing to consider how alternatives to its preferred rule could be more effective in reducing greenhouse gases. In the court’s view, the global environmental impacts of carbon emissions were precisely the type of effect targeted by NEPA. Even though any one agency action might have only a minor effect on climate change, those effects cumulate over time. Thus, the agency was required to provide sufficient information about the climate impacts of its regulation to allow readers to place the action in the context of the cumulative effects of government climate policy. Courts have followed this precedent in requiring consideration of climate impacts for large transportation projects and transmission lines, as well as related rulemakings. One of the remaining areas of uncertainty is when climate emissions rise to the level where their impacts are “significant” and require a full-scale EIS.

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3. Adaptation issues Although earlier climate litigation focused almost exclusively on reducing carbon 41 emissions, litigation over adaptation-related issues is becoming more significant. Some of the key impacts of climate change are ecological. The evidence already shows 31 See Natural Resource Defense Council v. Perry, 940 F.3d 1072, 1073 (9th Cir. 2019); Wisconsin v. EPA, 938 F.3d 303 (D.C. Cir. 2019); National Resource Defense Council v. Nat’l Highway Traffic Safety Admin., 894 F.3d 95 (2d Cir. 2018); Clean Air Council v. Pruitt, 862 F.3d 1 (D.C. Cir. 2017); In re Ozone Designation Litigation, 286 F. Supp. 3d 1082 (N.D. Cal. 2018); California v. U.S. Bureau of Land Management, 277 F. Supp. 3d 1106 (N.D. Cal. 2017). 32 Markell/Ruhl, Fla. St. L. Rev., 57. 33 42 U.S.C. § 4332(2)(c). 34 Robertson v. Methow Valley Citizens Council, 490 U.S. 332 (1989). 35 538 F.3d 1172 (9th Cir. 2008).

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significant effects of climate change on animal and plant life. According to climate scientists, given the relatively small degree of global warming to date, clear impacts on species are already observable. For this reason, irreversible harm could occur to ecosystems as their resilience levels are exceeded. Indeed, some ecologists are speaking of the current era as akin to the great extinction events in the geological record.36 Yet, specific effects on particular ecosystems are harder to predict than purely physical changes because of the complexity of biological systems. Both the potential for extinction and the difficulties of making precise predictions pose problems for the legal system. Nevertheless, preventive measures to preserve ecosystems in the face of climate change are clearly warranted. 42 In the United States, the key mechanisms for protecting biodiversity is the Endangered Species Act.37 A short survey of the statute is in order as a prelude to discussion of its treatment of climate change. The first step in applying the statute is the listing of an endangered or threatened species. The Secretary of the Interior (in the case of landbased and freshwater species) or the Secretary of Commerce (in the case of marine species) must “determine whether any species is an endangered species or a threatened species” based on a series of factors, including “the present or threatened destruction, modification, or curtailment of its habitat or range” and “other natural or manmade factors affecting its continued existence.”38 Climate change falls under the first category as a cause of habitat modification or destruction, as well as under the catchall category as a “natural or manmade factor.” One a species is listed, federal agencies must not take any action (including funding or issuing a permit) that would jeopardize the survival of the species.39 Private parties may not capture or kill members of the species or adversely modify their habitat.40 43 The emblematic victim of climate change is the polar bear, whose listing as a threatened species was upheld by the appropriately named In re Polar Bear case.41 The Polar Bear case involved a number of issues relating to application of the statute, including potential uncertainties regarding the impact of climate change on the bears. The court held that the agency was entitled to take a precautionary approach in the face of uncertainty, and that it was reasonable to use a forty-five-year time frame for considering whether the species faced a threat to its survival. 44 Although the polar bear is a particularly obvious victim of climate change, climate change has been a factor in other listing-related decisions. It seems clear that agencies simply cannot ignore climate change in listing decisions. For instance, in Greater Yellowstone Coalition v. Servheen,42 the court struck down a decision to remove the Yellowstone grizzly bear from the endangered list for this reason. Other adaptation issues are beginning to receive more attention from the courts. For instance, claims have been brought that new water infrastructure will not meet required standards over the course of its lifetime due to climate change; that utilities have failed to take sufficient steps to ensure the reliability of their service given climate-change-related increases in severe weather events; and that state plans for funding water quality improvements had failed to take climate change into account.43 36

See Kolbert, The Sixth Extinction: An Unnatural History (2014). 16 U.S.C. § 1531. 38 16 U.S.C. § 1533(a) (2000). 39 16 U.S.C. § 1536(a)(2). 40 Babbitt v. Sweet Home Chapter of Communities For a Great Oregon, 515 U.S. 687 (1995). 41 In Re Polar Bear Endangered Species Act Listing and Section 4(D) Rule Litigation – MDL NO. 1993, 709 F.3d 1 (D.C. Cir. 2013). 42 665 1015 (9th Cir. 2011). 43 Peel/Osofsky, Minn. L. Rev., 2197–2211. 37

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4. Non-statutory claims Some of the most creative climate litigation is based on the public trust doctrine.44 45 Many scholars trace the origins of this doctrine back to Roman law, though this is disputed. Essentially, this doctrine holds that the government holds title to the land under navigable waters, and to the waterways themselves, in trust for the public. Thus, it has a legal duty to prevent damage to these water bodies and to keep them available for public use. For this reason, it cannot transfer title to private parties for their own profit where such a transfer would injure the rights of the public.45 Although the doctrine was originally intended to protect public rights to navigation and fishing, it has now expanded to include environmental values.46 For instance, a Hawaiian Supreme Court decision held that the government had a duty to preserve water for future generations.47 Can the public trust doctrine be used to compel government action to address climate change? Professor Lazarus argues that the climate change issue is far beyond judicial remedy: “[A]ddressing sweeping problems like climate change will require our most creative thinking to craft political strategies and lawmaking institutions capable of breaking the logjam that has paralyzed our ability to make and maintain the laws necessary for the viability of future generations. Such complex lawmaking challenges are not going to be overcome in the first instance in any truly significant and long-lasting way by the judiciary relying on the public trust doctrine.”48 A federal district court held, however, that government inaction against climate 46 change may violate its public trust obligations. The plaintiffs, a group of children, argued that the government violated “their substantive due process rights to life, liberty, and property, and that defendants have violated their obligation to hold certain natural resources in trust for the people and for future generations.”49 According to the court, given that some of the injuries claimed by the plaintiffs relate to ocean acidification rising ocean temperatures, they had adequately alleged harm to water bodies protected by the public trust doctrine.50 The court left for a later time consideration of the plaintiffs’ claim that the atmosphere is also subject to the public trust. The court also grounded the public trust claim in the plaintiff’s right to due process. It also invoked due process as an independent basis for its decision. In the court’s view, “where a complaint alleges governmental action is affirmatively and substantially damaging the climate system in a way that will cause human deaths, shorten human lifespans, result in widespread damage to property, threaten human food sources, and dramatically alter the planet’s ecosystem, it states a claim for a due process violation.”51 The court noted, however, that caution would be required in crafting a remedy: “Should plaintiffs prevail on the merits, this Court would no doubt be compelled to exercise great care to avoid separation-of-powers problems in crafting a remedy. The separation of powers might, for example, permit the Court to direct defendants to ameliorate plaintiffs’ injuries but limit its ability to specify precisely how to do so.”52 44

Klass, Notre Dame L. Rev., provides a thorough introduction to this topic. See Illinois Central Railroad Co. v. Illinois, 146 U.S. 387 (1892). 46 See National Audubon Society v. Superior Court, 658 P. 2d 709 (Cal. 1983). 47 In Re Wai’ola O Moloka’I, Inc., 83 P3d 664 (Haw. 2004). 48 Lazarus, 45 Envtl. L. 1139, 1161 (2015). 49 See Juliana v. United States, 217 F. Supp. 3d 1224, 1233 (D. Or. 2016). 50 Id. at 1241. 51 Id. at 1250. 52 Id. at 1241. 45

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Normally, the next step would have been for the case to go to trial. A defendant generally cannot appeal a case until after judgment is entered against, but the federal government was unwilling to go through a trial. The U.S. Court of Appeals for the Ninth Circuit rebuffed repeated efforts by the government to obtain extraordinary appellate intervention to end the case.53 After prodding from the Supreme Court and then the Ninth Circuit, however, the trial judge agreed to certify for immediate the order rejecting the government’s effort to dismiss the case.54 While this chapter was in the publication process, the federal appeals court reversed the trial court in the Juliana case.55 The appeals court conceded that “[t]he plaintiffs have made a compelling case that action is needed; it will be increasingly difficult in light of that record for the political branches to deny that climate change is occurring, that the government has had a role in causing it, and that our elected officials have a moral responsibility to seek solutions.” Nevertheless, the court held that it had no power to intervene, because such a major change in government policy could only be made by the elected branches of government. In the view of the majority of the Court, “any effective plan would necessarily require a host of complex policy decisions entrusted, for better or worse, to the wisdom and discretion of the executive and legislative branches.” There was a forceful dissenting opinion. The dissenter argued the case involved the fundamental principle that “the Constitution does not condone the Nation’s willful destruction.” In the view of the dissenting judge, “considering plaintiffs seek no less than to forestall the Nation’s demise, even a partial and temporary reprieve would constitute meaningful redress.” The majority, however, were unpersuaded. Thus, the plaintiffs’ remaining option is to appeal to the Supreme Court. In the meantime, the litigation has given rise to extensive scholarly discussion.56 48 It will be very difficult for the plaintiffs to prevail in this litigation before the Supreme Court. Their public trust claim goes well beyond conventional doctrine in requiring a transformation of government policy at such a scale, and their claim that there is a constitutional right to a liveable climate has no precedent. The public trust doctrine has never been previously applied by the Supreme Court to require a major change in federal policy. Given that conservatives now hold a solid majority on the Supreme Court, it seems unlikely that the necessary votes could be obtained in favour of the district court’s ruling. Nevertheless, the litigation may already have had a positive effect in terms of mobilizing public opinion.57 47

IV. Tort liability 49

As discussed earlier, the Supreme Court has held that plaintiffs cannot file damage suits based on climate change directly in federal court. This has prompted efforts to file such lawsuits in state court.58 Assuming that the jurisdictional issues discussed earlier are resolved, those courts will have to consider whether state tort law provides a remedy against carbon emitters.

1. Nuisance law and climate change 50

Tort claims involving climate change have generally been based on the common-law nuisance doctrine. There are actually two types of nuisance, public and private. A See In re United States, 895 F.3d 1101, 1104 (9th Cir. 2018). Juliana v. United States, 2018 WL 630377 (Nov. 21, 2018). 55 Juliana v. United States, 947 F.3d 1159, 1175 (9th Cir. 2020). 56 See, Blumm, 46 Env. L. 481 (2016); Castillo, 6 San Diego J. Climate & Energy L. 221 (2015). 57 Levy, Harv. Env. L. Rev., 495–505. 58 For case studies of this litigation, see McGarity/Shapiro/Sokol/Flores, Center for Progressive Reform. 53 54

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private nuisance involves damage to the plaintiff’s use of its land, when the harm is either intentional, negligent, or involves an uncommon, abnormally dangerous activity.59 A public nuisance, which seems more applicable to climate change, is an unreasonable interference with the rights of the public, not just a few specific individuals. According to the authoritative summary of the Restatement of Torts, two of the circumstances supporting a finding of public nuisance are that defendant’s conduct significantly interferes with public health or safety, or that the conduct is “of a continuous nature or has produced a permanent or long-lasting effect.”60 To recover damages, the plaintiff must show an injury distinguishable from that common to the entire public, but that requirement is generally satisfied by a showing of physical harm.61 Although the concept of public nuisance seems to comport with climate change, 51 some might argue that use of tort law is inappropriate because the public policy issues involves are too important to be left to courts. Whether courts find this persuasive is likely to come down to their willingness to make exceptions to existing doctrine based on more abstract concerns about the separation of powers, and to their sense of whether it is appropriate for courts to take the lead on major public policy issues.

2. Causation issues As we saw earlier, causation issues arise in standing law, under the requirement that 52 the plaintiff’s injury be “fairly traceable” to the defendant’s actions. In that form, causation issues may prove a challenge that would prevent a tort case from being brought in federal court.62 State courts may have their own approaches to standing, which may or may not present a barrier. But even if plaintiffs obtain standing, they must still produce evidence of causation sufficient to satisfy the requirements of tort law, which may be different than what is required merely to establish jurisdiction. One issue confronting plaintiffs is that the chain of causation from carbon emissions to changes in the earth’s climate and then to the plaintiff’s injury may be long and complex. But this in itself should not prevent recovery. Under American tort law, it is not necessary that the defendant’s actions be the direct cause of harm. The general rule is that it is sufficient if the harm would be foreseeable to a reasonable person.63 Perhaps some earlier carbon emissions occurred at a time when climate change was not well understood. But harm from climate change was clearly foreseeable by the later part of the last century. Another issue related to causation is that no single defendant was responsible for 53 sufficient emissions to have caused dangerous climate change (and hence the harm to the plaintiff). This itself should not be a barrier to recovery. It is well-established that an actor may responsible even when the harm was the result of the cumulative contributions of multiple parties. For instance, when multiple doses of a toxic chemical combine to cause the plaintiff’s illness, each of the toxic exposures is considered a cause of the harm.64 A defendant may be excused from liability, however, its conduct “constitutes only a negligible contribution” to causing the harm.65 That proviso may preclude tort recovery against smaller emitters whose contribution to climate change was minor. 59 American Law Institute, A Concise Restatement of Torts, 3rd ed. 2013, Section 822. Note that the provisions relating to nuisance law in this volume are from the Second Restatement of Torts, since the Third Restatement has not yet dealt with this topic. 60 Id., Section 821B(2). 61 Id., Section 821C, comment d. 62 Butti, Sustainable Dev. L. & Policy, 33. 63 American Law Institute, A Concise Restatement of Torts, 3rd ed. 2013, Section 29, Comments e and j. Note that the citations here and in the succeeding footnotes are to the Third Restatement. 64 Id., Section 27, Comments f and g. See also Section 28, Comment c on subsection (a). 65 Id., Section 36.

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Part 4. Climate change litigation – National reports 54

Tort actions so far have sought two forms of damages. Some have sought compensation for harm from extreme weather events such as hurricanes. To be tenable, such claims must be supported by scientific evidence causally connecting the weather event with climate change. To avoid that problem of proof, other defendants such as cities have sought compensation for precautions they have been forced to take because of climate change, such as building higher sea walls.66 Here again there is a causation issue, since it is necessary to show that the expenses were only required because of climate change.

3. Litigation prospects 55

Tort actions based on climate change face a series of barriers. To begin with plaintiffs must establish standing under federal or state law, and establish personal jurisdiction over carbon emitters. They must then persuade the court the carbon emission or producing fossil fuels is a public nuisance, and make the requisite showing of causation. Along the way, cases may be removed from more sympathetic state tribunals to federal court. It remains to be seen whether any cases survive this gauntlet and make it to final judgment.

V. Conclusion Markell and Ruhl observed in 2012 that “the story of climate change in the courts has not been one of forging a new jurisprudence, but rather one of operating under business as usual.”67 That remains largely true today. In part, the reason may be that Congress has failed to enact climate-specific legislation, giving courts no new material to work with. 57 To be sure, there are arguable exceptions to the general trend of applying conventional legal doctrine. In City of Oakland, the trial judge stretched rules about federal jurisdiction and federal pre-emption of state law, based on his evident sense that climate change is too big an issue for courts to take the lead. On the other side, in Juliana, the trial judge stretched public trust and constitutional doctrine, based on her evident sense that climate change is too urgent an issue for courts to leave in limbo. But so far, these are exceptional cases. There is little evidence that the Supreme Court has deviated from conventional doctrine. Perhaps one might argue that in Massachusetts v. EPA, the Supreme Court stretched standing law to intervene in a dispute about climate law, though it simply required EPA to regulate without any instruction on how to do so. Standing doctrine is unclear enough, however, that it is hard to say whether the Court really broke with existing law. In the later UARG case, the same court repulsed EPA’s effort to creatively rewrite the law to deal with the unprecedented problems posed by climate change. In short, for most courts, climate change litigation has been treated as business-as-usual. 58 Applying conventional legal doctrines, plaintiffs have had considerable success in using administrative law to pursue statutory claims against federal agencies. By doing so, they have succeeded in extending EPA jurisdiction to include greenhouse gases, require consideration of climate change in environmental impact statements, and extend legal production to species imperilled by climate change. It is less clear that recovery of damages will succeed. In any event, it is clear that while courts cannot solve the problem, they can usefully contribute to the societal response to climate change. 56

66 Such damages could be analogized to the expense of medical monitoring required because of exposure to toxic chemicals, which can be recovered under Ayers v. Township of Jackson, 525 A. 2d 287 (N.J. 1987). 67 Markell/Ruhl, Fla. St. Univ. L. Rev., 85.

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L. Climate change litigation in Canada Bibliography: Jurisprudence: A c. Watch Tower Bible and Tract Society of Canada, 2019 QCCS 729; Asselin v. Desjardins Cabinet de services financiers inc., 2017 QCCA 1673; Burgess v. Ontario Minister of Natural Resources and Forestry, Court File No. 16-1325 CP; Chicago Climate Exchange v. Bourse de Montréal [2014] Carswell Nat 1045; Clean Train Coalition Inc v Metrolinx, 2012 ONSC 6593; Coalition contre le bruit c. Shawinigan (Ville de), 2012 QCCS 5574; Environnement Jeunesse c Procureur général du Canada, 2019 QCCS 2885; Friends of the Oldman River Society v. Canada (Minister of Transport) [1992] 1SCR 3; In the Matter of subsection 17(40) of the Planning Act, R.S.O 1990, P.13 as amended [2013] Carswell Ont 15294; R v Crown Zellerbach Canada Ltd, [1988] 1 SCR 401 at 70; La Rose v. Her Majesty the Queen, 2019 T-1750-19; Major c. Zimmer inc., 2016 QCCS 3093; Mathur, et al. v. Her Majesty the Queen in Right of Ontario, 2019 CV-19-00631627; Michael Mann v. Timothy (“Tim”) Ball, The Frontier Centre for Public Policy, Inc. and John Doe, 2011 Court No. VLC-S-S-111913; Pontbriand c. Québec (Procureur général), 2004 CanLII 16852 (QCCS); Québec (Curateur public) c. Syndicat national des employés de l’hôpital St-Ferdinand, [1996] 3 RCS 211; Reference re pan‐Canadian securities regulation, 2018 SCC 48, [2018] 3 S.C.R. 189; Syncrude Canada Ltd. v. The Attorney General of Canada, [2016] FCA 160; Vivendi Canada inc. v. Dell’Aniello, 2014 SCC 1; Weaver v. Corcoran and Others, 2015 BCSC 165; Legislation: Constitution Act, 1867, 30 & 31 Vict, c 3, s 91, 92, reprinted in RSC 1985, Appendix II, No 5; Greenhouse Gas Pollution Pricing Act (S.C. 2018, c. 12, s. 186); Kyoto Protocol Implementation Act S. C. 2007, c. 30; UN Human Rights Council resolution 32/33, “Human Rights and Climate Change,” UN Doc. A/HRC/RES/32/33 (2016); UNFCCC COP, Paris Agreement UN doc FCCC/CP/ 2015/10/Add.1 (2015); Secondary sources: Bernstein, “International Institutions and the Framing of Domestic Policies: The Kyoto Protocol and Canada’s Response to Climate Change” Pol’y Sciences 35:2 2002, 203; “Canada aligns regulations with United States to cut air pollution from vehicles and gasoline” Environment Canada July 29, 2015, online: https://www.canada.ca/en/news/archive/2015/07/harper-government-introduces-stringent-new-standards-cleaner-vehicles-fuels.html; “Canada’s Emissions Trends” Environment Canada July 2011, online: https://www.ec.gc.ca/doc/publications/cc/COM1374/ec-com1374-en-es.htm; Chalifour, “Jurisdictional Wrangling over Climate Policy in the Canadian Federation: Key Issues in the Provincial Constitutional Challenges to Parliament’s Greenhouse Gas Pollution Pricing Act” Ottawa Law Review 50:2 2019; Climate Action Tracker. 2019a. “Country Summary: Canada.” 2019, available at: https:// climateactiontracker.org/countries/canada/current-policy-projections/; Commissioner for Human Rights, “Analytical study on the relationship between climate change and the full and effective enjoyment of the rights of the children,” UN Doc, A/HRC/35/13 (2017); Country Summary: Canada.” Climate Action Tracker 2019, online: https://climateactiontracker.org/countries/canada/current-policy-projections/; Gibbons, “Climate Change, Children’s Rights, and the Pursuit of Intergenerational Climate Justice,” Health and Human Rights Journal 16, no. 1 (2014): (1–18); “Greenhouse Gas Emissions” (2019), online: the Conference Board of Canada https://www.conferenceboard.ca/hcp/Details/Environment/greenhouse-gasemissions.aspx; Harrison, “Federalism and Climate Policy Innovation: A Critical Reassessment” Canadian Public Policy XXXIX:2 2013, S95; Macdonald, “Explaining the Failure of Canadian Climate Policy” in: Compston, Bailey (eds.) Turning Down the Heat 2008, 223; Maciunas & de Lassus Saint-Geniès, “The Evolution of Canada’s International and Domestic Climate Policy: From Divergence to Consistency?” in: Fitzgerald, Hughes and Jewett, (eds.), Reflections on Canada’s Past, Present and Future in International Law 2018, 281; MacLean “Will We Ever Have Paris: Canada’s Climate Change Policy and Federalism 3.0” Alberta Law Review 55:4 2018, 889; Office of the High Commissioner for Human Rights, “Analytical study on the relationship between climate change and the full and effective enjoyment of the rights of the children,” UN Doc, A/HRC/35/13 (2017). “Pan-Canadian Framework on Clean Growth and Climate Change: Canada’s Plan to Address Climate Change and Grow the Economy” (2016) at 7, online (pdf): Government of Canada http://publications.gc.ca/collections/collection_2017/eccc/En4-294-2016-eng.pdf; “Perspectives on Climate Change Action in Canada – A Collaborative Report from Auditors General” (March 2018), online: Office of the Auditor General of Canada http://www.oag-bvg.gc.ca/internet/English/ parl_otp_201803_e_42883.html; “Progress Towards Canada’s Greenhouse Gas Emissions Reduction Targets: Canadian Environmental Sustainability Indicators” Environment and Climate Change Canada 2020, online: https://www.canada.ca/en/environment-climate-change/services/environmental-indicators/ progress-towards-canada-greenhouse-gas-emissions-reduction-target.html; Slattery, “Pathways from Paris: Does Urgenda Lead to Canada?” Journal of Environmental Law & Practice 30:3 2017, 241;

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Part 4. Climate change litigation – National reports UNFCCC Compliance Committee “Canada’s withdrawal from the Kyoto Protocol and its effects on Canada’s reporting obligations under the Protocol” UN doc CC/EB/25/2014/2 (2014); Van Ert, “Dubious Dualism: the reception of International Law in Canada” Valparaiso University L R 44 2010, 927; “2014 Fall Report of the Commissioner of the Environment and Sustainable Development” (Fall 2014) at 1.36, 1.39, online: Office of the Auditor General of Canada http://www.oag-bvg.gc.ca/internet/English/parl_ cesd_201410_01_e_39848.html.

Contents I. Introduction ..................................................................................................... II. Climate law and governance in Canada .................................................... III. Litigation relating to the authority of the federal government to address climate change .................................................................................. 1. Syncrude Canada Ltd. v. The Attorney General of Canada............. 2. The GHG pollution pricing reference cases......................................... IV. Litigation relating to the obligation of governments and public bodies to address climate change ................................................................ 1. Cases involving a failure of public bodies to adequately consider GHG emissions ........................................................................................... 2. Litigation relating to the Kyoto Protocol.............................................. a) Friends of the Earth v. The Governor in Council and Others... b) Turp v. Minister of Justice and Attorney General of Canada .... 3. Rights-based climate lawsuits .................................................................. V. Conclusion........................................................................................................

1 3 11 11 16 29 29 37 38 42 47 56

I. Introduction 1

Until very recently, Canada had not been a jurisdiction of much significance for the field of climate litigation. Between 2008 and 2016, only fifteen climate-related lawsuits were initiated in Canada and many were either dismissed or abandoned at a preliminary stage,1 only tangentially addressed climate change,2 or were of limited scope and impact.3 Meanwhile, the climate cases of national importance that were decided during this period did little to alter the status quo of incremental climate action that has defined Canada’s underwhelming efforts to address the climate crisis.4 This changed throughout 2018 and 2019, when several important climate cases were initiated that have the potential to reshape the configuration of climate governance in Canada as well as address Canada’s historic lack of ambition in addressing the climate crisis. 1 Burgess v. Ontario Minister of Natural Resources and Forestry, Court File No. 16-1325 CP (class action on behalf of property owners that suffered damages due to flooding, suggesting that the government had a duty to avert foreseeable flooding); Clean Train Coalition Inc v Metrolinx, 2012 ONSC 6593 (Clean Train Coalition Ltd. sought judicial review of Metrolinx’s decision to purchase “diesel multiple units” on a new rail system, arguing that the respondent had an obligation to better investigate an electric alternative); and Michael Mann v. Timothy (“Tim”) Ball, The Frontier Centre for Public Policy, Inc. and John Doe, 2011 Court No. VLC-S-S-111913. (A climate scientist filed a libel claim against a journalist and others who falsely suggested that he was guilty of criminal fraud in relation to the alleged “Climategate” scandal). 2 Chicago Climate Exchange v. Bourse de Montréal [2014] Carswell Nat 1045 (in which the Chicago Climate Exchange successfully challenged the Bourse de Montréal’s application to register a trademark for the Montreal Climate Exchange) and Weaver v. Corcoran and Others, 2015 BCSC 165 (A climate scientist filed suit against a newspaper, its publisher, and journalists for defamation in connection with the “Climategate” scandal regarding articles published that deliberately created a false image of the scientist.). 3 In the Matter of subsection 17(40) of the Planning Act, R.S.O 1990, P.13 as amended [2013] Carswell Ont 15294 (The City of Brampton amended its plan to include climate considerations). 4 Slattery, “Pathways from Paris: Does Urgenda Lead to Canada?” Journal of Environmental Law & Practice 30:3 2017, 241 (266–269).

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L. Climate change litigation in Canada

This chapter offers an overview of the evolving landscape of climate litigation in 2 Canada. In part II, we provide a brief introduction to climate law and governance in Canada. In part III, we address climate litigation that has challenged the authority of the federal government to regulate GHG emissions or adopt climate-related measures. In part IV, we discuss climate cases that address the obligations of federal and provincial governments and regulatory bodies to tackle climate change. Finally, in part V, we identify key themes that emerge from our discussion of climate litigation in Canada.

II. Climate law and governance in Canada At the outset, it is worth mentioning three important features of Canada’s constitu- 3 tional order that have shaped its approach to climate change. First, Canada has a dualist system with regards to the domestic reception of international law. The executive branch holds the sole prerogative over foreign affairs and the consultation or involvement of the legislative branch is not required in the negotiation or conclusion of international treaties.5 At the same time, international conventions are not self-executing and legislative implementation is required “if they are to enjoy direct legal effect in Canadian law.”6 Second, Canada is a federation in which powers to regulate different matters are 4 distributed between the provincial and federal governments.7 Among other areas, the Constitution provides the provinces with authority to regulate non-renewable natural resources, including fossil fuels.8 Significant variations in the resources found in different provinces has resulted in large disparities in the carbon intensity of provincial economies9 and has led some provinces to oppose ambitious climate action. In turn, this has significantly affected the nature and ambition of Canada’s efforts to combat climate change.10 Third, because the environment has been held to be a matter of shared jurisdiction 5 between the federal and provincial governments,11 the federal and provincial governments have asserted and wrangled over their competence to deal with climate change. One the one hand, the provinces have the authority to enact legislation on matters relating to climate change due to their competence over property and civil rights under section 92(13). On the other hand, the federal government may hold authority over climate change under three different heads of power: the regulation of trade and commerce (section 91(2)), criminal law (section 91(27)), and peace, order and good 5 Van Ert, Dubious Dualism: the reception of International Law in Canada, Valparaiso University L R 44 2010, 927 (927). 6 Ibid. 928. 7 Constitution Act, 1867, 30 & 31 Vict, c 3, s 91, 92, reprinted in RSC 1985, Appendix II, No 5. 8 Ibid. art. 92(A). 9 While the emissions of most of Canada’s provinces fall within 10–20 tonnes CO e per capita, Alberta 2 and Saskatchewan emit each nearly 70 tonnes CO2e per capita. These provinces emit over six times as much GHG as Quebec and over three times as much as the national average. Alberta and Saskatchewan have significant emissions from electricity production based on fossil fuel production. Reliance on coal significantly raises the emissions levels. Most of the emissions, however, are coming from the mining and oil and gas industries. Furthermore, both provinces have large amounts of farms, which also produce high emissions. The available natural resources in these provinces have led the provinces to pursue fossil-fuel based economic activities. See: “Greenhouse Gas Emissions” (2019), online: the Conference Board of Canada https://www.conferenceboard.ca/hcp/Details/Environment/greenhouse-gas-emissions.aspx. 10 MacLean, Will We Ever Have Paris: Canada’s Climate Change Policy and Federalism 3.0, Alberta Law Review 55:4 2018, 889 (903–904). 11 R v Crown Zellerbach Canada Ltd, [1988] 1 SCR 401, para 70.

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government (POGG).12 As we shall explain in part III below, whether or not the federal government has the authority to regulate carbon emissions has been at the heart of two important climate cases in Canada. 6 This constitutional context, along with the resource-intensive political economy and lifestyle that are prevalent in Canada,13 help explain why its efforts in the field of climate change have until recently been largely symbolic and not resulted in concrete policies to significantly reduce GHG emissions.14 Canada signed the United Nations Framework Convention on Climate Change in 1992 and committed under the Kyoto Protocol to reducing its GHG emissions by six percent below 1990 levels between 2008 and 2012.15 In 1995, Canada’s federal, provincial, and territorial governments adopted the National Action Program on Climate Change (NAPCC).16 This program was primarily comprised of voluntary measures, such as a registry for voluntary emissions reductions pursued by businesses,17 and had a negligible effect on Canada’s GHG emissions.18 Although it released several action plans to achieve its emissions reductions objectives under Kyoto, these policies mainly aimed to provide information and subsidies to promote and encourage voluntary measures and achieved little in the way of climate mitigation.19 Any efforts to take serious action on climate change, such as the establishment of a Climate Fund to manage the purchase of greenhouse gas credits and an amendment to the Canadian Environmental Protection Act to add six greenhouse gases to the “List of Toxic Substances” in Schedule 1 of the Act, were halted with the election of a Conservative government in February 2006.20 7 During the next decade of conservative rule under Prime Minister Stephen Harper, the federal government’s efforts to combat climate change continued to be wanting.21 Some of the regulations adopted during this period imposed emissions reductions requirements for passenger vehicles, light trucks, and heavy-duty vehicles, required minimum renewable content for gasoline and diesel, and compelled improved standards for new coal-fired generating stations.22 In 2007, while the Conservative government led a minority parliament, the opposition parties in the House of Commons adopted the Kyoto Protocol Implementation Act S. C. 2007, c. 30 (KPIA) to oblige the Minister of the Environment and Governor in Council to prepare an annual plan describing the measures to be taken to ensure Canada met its obligations under the Kyoto Protocol.23

12 Chalifour, Jurisdictional Wrangling over Climate Policy in the Canadian Federation: Key Issues in the Provincial Constitutional Challenges to Parliament’s Greenhouse Gas Pollution Pricing Act, Ottawa Law Review 50:2 2019. 13 Canada is currently the world third largest GHG emitter per capita, after the United States and Australia: See Greenhouse Gas Emissions, (fn. 9). 14 Harrison, Federalism and Climate Policy Innovation: A Critical Reassessment, Canadian Public Policy, XXXIX:2 2013, S95. 15 Maciunas/de Lassus Saint-Geniès, The Evolution of Canada’s International and Domestic Climate Policy: From Divergence to Consistency?, in: Fitzgerald/Hughes/Jewett, (eds.), Reflections on Canada’s Past, Present and Future in International Law, 2018, 281 (284). 16 Ibid. 285. 17 Ibid. 288. 18 Bernstein, International Institutions and the Framing of Domestic Policies: The Kyoto Protocol and Canada’s Response to Climate Change, Pol’y Sciences 35:2 2002, 203 (223). 19 Maciunas/de Lassus Saint-Geniès, (fn. 15), 288. 20 Ibid. 286. 21 Ibid. 288. 22 Canada aligns regulations with United States to cut air pollution from vehicles and gasoline, Environment Canada, July 29, 2015, online: https://www.canada.ca/en/news/archive/2015/07/harpergovernment-introduces-stringent-new-standards-cleaner-vehicles-fuels.html. 23 Kyoto Protocol Implementation Act S. C. 2007, c. 30.

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As a result of liberal and conservative inaction on climate change, Canada’s GHG 8 emissions actually grew by 24 % between 1997 and 2008.24 In 2011, the Conservative government announced that Canada would be withdrawing from the Kyoto Protocol, becoming the first country in the world to do so.25 Under the Copenhagen Accord adopted in 2009, Canada voluntarily committed to lowering its emissions by 17 percent below 2005 levels by 2020.26 Yet, a 2014 report by the Commissioner for the Environment and Sustainable Development concluded that “Environment Canada has no overall implementation plan that indicated how different regulations or how different federal departments and agencies would work together to achieve the reductions required to meet the 2020 target of the Copenhagen Accord.”27 The election of a liberal government led by Justin Trudeau provided a new impetus to 9 Canada’s initiatives in the field of climate action. After ratifying the Paris Agreement in 2016, Canada submitted an Intended Nationally Determined Contribution (INDC) in which it pledged to reduce its GHG emissions by 30 % below 2005 levels by 2030.28 With the adoption of the Pan-Canadian Climate Framework29 in 2016 and the implementation of several policy measures, Canada has finally begun to take concrete actions to reduce its GHG emissions.30 The Pan-Canadian Framework has four principal pillars: (1) pricing carbon pollution; (2) complementary climate actions; (3) adaptation measures to build resilience; and (4) actions to foster innovation, clean technology and job creation. The framework most notably requires that all provinces and territories enact a form of carbon pricing, while providing them with flexibility to craft their preferred carbon pricing arrangement that meet federal standards. The federal government has also established a “backstop” program whereby it can impose a federal carbon levy in provinces and territories that do not have carbon pricing program or whose program does not meet federal standards.31 While the Trudeau government has done more than any other government in 10 Canadian history to combat climate change, a 2018 report by Canada’s Auditor-General estimates that Canada will not reach its 2020 Copenhagen target.32 Indeed, according to estimates by the Climate Action Tracker, Canada’s current emissions reduction pledge is consistent with a global rise in average temperatures of over 3 degrees Celsius, far above the limit of 1.5 degrees Celsius enshrined in the Paris Agreement.33 24 Perspectives on Climate Change Action in Canada – A Collaborative Report from Auditors General, Office of the Auditor General of Canada, March 2018, online: http://www.oag-bvg.gc.ca/internet/English/ parl_otp_201803_e_42883.html, exhibit 11. 25 UNFCCC Compliance Committee “Canada’s withdrawal from the Kyoto Protocol and its effects on Canada’s reporting obligations under the Protocol” UN doc CC/EB/25/2014/2 (2014), para 5. 26 “Canada’s Emissions Trends” Environment Canada July 2011, online: https://www.ec.gc.ca/doc/ publications/cc/COM1374/ec-com1374-en-es.htm. 27 2014 Fall Report of the Commissioner of the Environment and Sustainable Development, Office of the Auditor General of Canada, 2014, online: http://www.oag-bvg.gc.ca/internet/English/parl_cesd_ 201410_01_e_39848.html p. 1.36, p. 1.39. 28 Maciunas/de Lassus Saint-Geniès, (fn.15), 294. 29 “Pan-Canadian Framework on Clean Growth and Climate Change: Canada’s Plan to Address Climate Change and Grow the Economy” Government of Canada 2016, online (pdf): http://publications. gc.ca/collections/collection_2017/eccc/En4-294-2016-eng.pdf, 7. 30 “Progress Towards Canada’s Greenhouse Gas Emissions Reduction Targets: Canadian Environmental Sustainability Indicators” Environment and Climate Change Canada 2020, online: https://www.canada. ca/en/environment-climate-change/services/environmental-indicators/progress-towards-canada-greenhouse-gas-emissions-reduction-target.html. 31 Greenhouse Gas Pollution Pricing Act S.C. 2018, c. 12, s. 186. 32 “Perspectives on Climate Change Action in Canada”, (fn. 24). 33 Country Summary: Canada.” Climate Action Tracker 2019, online: https://climateactiontracker.org/ countries/canada/current-policy-projections/.

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III. Litigation relating to the authority of the federal government to address climate change 1. Syncrude Canada Ltd. v. The Attorney General of Canada A major Canadian oil company that produces diesel fuel, Syncrude Canada Ltd. (Syncrude), brought a case against Canada’s Ministry of Environment in 2014 challenging the validity of subsection 5(2) of the Renewable Fuel Regulations (RFRs), which required that all diesel fuel produced, imported or sold in Canada contain at least 2 % of renewable fuel.34 At first instance, Justice Zinn found that a valid criminal law purpose existed in the protection of the environment from pollution and rejected Syncrude argument that, in order to be a legitimate use of the criminal power, the requirement of renewable fuels had to be based on an assessment that it would make a significant contribution to the reduction of air pollution.35 Further, Justice Zinn also held that the Minister of Environment had not failed to afford Syncrude procedural fairness by rejecting its request for a review of this regulation, since such a duty does not apply, under Canadian common law, to legislative decisions that apply to general matters.36 12 On appeal, Syncrude advanced two errors in the Federal Court’s decision. First, Syncrude argued that the RFRs were not a valid exercise of criminal law power because they do not completely prohibit or ban the use of fossil fuels and that fossil fuels are not inherently dangerous.37 It maintained that the RFRs were properly characterized as an economic measure aimed at the creation of a local market for renewable fuels, rather than the reduction of air pollution. As such, Syncrude argued that this regulation intruded on the powers held by the provinces to regulate local markets under 92(13) of the Constitution or to manage non-renewable natural resources under 92(A) of the Constitution.38 Second, Syncrude submitted that the judge erred in failing to conclude that the Governor in Council did not hold the requisite opinion under subsection 140 (2) that the RFRs would reduce air pollution.39 13 The Federal Court of Appeal found that subsection 5(2) of the RFRs was valid under both the Constitution Act of 1867 and CEPA. The Court found the RFRs were unambiguously directed at “maintaining the health and safety of Canadians, as well as the natural environment upon which life depends”.40 The Court moreover held that that protection of the environment falls within the scope of the federal government’s power over criminal law.41 14 The Court also rejected Syncrude’s arguments regarding the characterization of the RFRs under constitutional law. First, the Court held that the RFRs were not an economic measure, even if they reflected a careful consideration of the effects on affected industries and the creation of long-term demand for renewable fuels.42 Second, the Court found that the absence of a total prohibition on the use of non-renewable fuels did not preclude subsection 5(2) from being a valid exercise of Parliament’s criminal power: “The prohibition need not be total and it can admit exceptions…. 11

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Syncrude Canada Ltd. v. The Attorney General of Canada, [2016] FCA 160. Syncrude Canada Ltd. v. The Attorney General of Canada, [2014] FC 776. 36 Cf (fn. 34), paras 44–61. 37 Ibid. paras 22–23. 38 Ibid. para 20. 39 Ibid. para 25. 40 Ibid. para 41. 41 Ibid. para 49. 42 Ibid. para 61. 35

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Indeed, environmental regulations often set limits, or concentration of listed substances; so too do regulations of the food industry.”43 Third, the Court concluded that subsection 5(2) applied to Syncrude as a consumer of diesel fuel in its operations, not in its production of synthetic crude oil. The RFRs did not therefore affect provincial competence over the management of natural resources.44 Fourth, the Court noted moreover that the indirect economic effects of the exercise of criminal law power did not affect a law’s characterization for the purposes of assessing its constitutional validity: It would be extremely easy for Parliament to use the criminal law to protect the environment if Parliament had no concern for the economy; it could simply ban the consumption of fossil fuels. The challenge lies in protecting the environment while avoiding or compensating of negative economic side effects. In some cases, crafting the regime so as to mitigate the economic side effects may be the majority of the work. The fact that managing economic effects plays a role, even a large role, in a given law does not mean that the law is a colourable attempt to pursue an unconstitutional objective.45 Finally, the Court viewed Syncrude’s allegation that the RFRs do not reduce air 15 pollution as an invitation “to second guess the GiC’s opinion, an invitation that this Court should decline.” Even if there was different scientific evidence before the GiC, the Court reasoned that “it would not detract from the GiC forming a different opinion on admittedly different evidence.”46

2. The GHG pollution pricing reference cases Effective in January 2019, the Greenhouse Gas Pollution Pricing Act (GGPPA) 16 established a national price on GHG emissions, but only in any province or territory that had not yet implemented a pricing regime that met the federal standards for carbon pricing. This measure has proven politically contentious and has given rise to two cases initiated by the governments of Saskatchewan and Ontario requesting that their courts of appeal provide advisory opinions on the constitutionality of this act. On May 3, 2019, in an opinion authored by Justice Richards, the Court of Appeal for Saskatchewan ruled that the GGPPA is not unconstitutional with a 3–2 majority.47 On June 28, 2019, Justice Strathy, writing for a 4–1 majority in the Ontario Court of Appeal, found the same.48 The courts, in both cases, covered similar issues. First, both courts addressed the argument advanced by the provinces that this law is 17 unconstitutional because it is inconsistent with the unwritten constitutional principle of federalism. In the Saskatchewan case, Justice Richards ruled that “the principle of federalism is not a free-standing concept that can override an otherwise validly enacted law” but is rather a value to be used in Constitutional interpretation.49 It reaffirmed that Parliament either has authority to act or it does not and that the scope of Parliamentary authority is “not dependent on how or whether a province has exercised its own exclusive jurisdiction.”50 Justice Strathy reached a similar conclusion in the Ontario case.51 43

Ibid. para 73. Ibid. para 80. 45 Ibid. para 91. 46 Ibid. para 100. 47 Reference Re: Greenhouse Gas Pollution Pricing Act, 2019 SKCA 40. 48 Reference Re: Greenhouse Gas Pollution Pricing Act, 2019 ONCA 544. 49 Reference Re: SKCA, (fn. 51), para 9. 50 Ibid. para 67. 51 Reference Re: ONCA, (fn. 52), para 81. 44

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Second, the courts analysed whether the GGPPA imposed a tax in contravention of s. 53 of the Constitution Act, 1867. The Saskatchewan and Ontario Courts of Appeal found that the charges imposed pursuant to Part One of the GGPPA were not a tax because their primary purpose is not to raise revenue for general purposes (the primary purpose of a tax), but rather part of a regulatory plan to increase the cost of GHG emissions to mitigate them.52 19 Third, the Courts evaluated whether that GGPPA is valid under the federal power to make laws for the “peace, order and good government of Canada” under section 91 of the Constitution Act. In their decisions, the majorities in both courts examined whether the authority to enact the GGPPA could be justified under the “national concern” branch of the POGG test. The national concern branch applies to matters a) “of national consequence that have a singleness, distinctiveness and indivisibility clearly distinguishing them from matters coming within provincial jurisdiction” and b) with a scale of impact on provincial jurisdiction that is compatible with the basic division of powers between Parliament and the legislatures under the Constitution”.53 20 Canada suggested that the “pith and substance” of the GGPPA is the “cumulative dimensions of GHG emissions”, which is a matter of national concern that the provinces are constitutionally incapable of addressing.54 Justice Richards rejected Canada’s approach because it would allow Parliament “to intrude so deeply into areas of provincial authority that the balance of federalism would be upset” and further “would hamper and limit provincial efforts to deal with GHG emissions.”55 Likewise, Justice Strathy held that Canada’s characterization was deemed “too vague and confusing, since GHGs are inherently cumulative and the “cumulative dimensions” are undefined.”56 Instead, both Courts of Appeal distilled the GGPPA‘s purpose as ensuring that there is a minimum national price on GHG emissions to reduce greenhouse gas emissions.”57 21 Next, both courts held that establishing minimum national standards to reduce GHG emissions met the “singleness, distinctiveness and indivisibility” requirements. As summed up by Justice Strathy: 18

GHGs are a distinct form of pollution… They have known and chemically distinct scientific characteristics. They combine in the atmosphere to become persistent and indivisible in their contribution to anthropogenic climate change. They have no concern for provincial or national boundaries. Emitted anywhere, they cause climate change everywhere, with potentially catastrophic effects on the natural environment and on all forms of life. They are exactly the type of pollutant that both the majority and the minority in Crown Zellerbach contemplated would fall within the national concern branch of the POGG power.58 22

Similarly, Justice Richards found that Parliament has jurisdiction to establish “minimum national standards of price stringency,” an approach which “leaves plenty of room for provincial action in relation to GHG emissions.”59 Having most notably concluded that “the failure of one province to take action […] will have impacts on other

52

Reference Re: SKCA, (fn. 48), para 88; Reference Re: ONCA, (fn. 52), para 163. Ibid. para 10. 54 Reference Re: ONCA, (fn. 52), para 60. 55 Reference Re: SKCA, (fn. 51), para 10. 56 Ibid. para 74. 57 Reference Re: SKCA, (fn. 51), para 10–11; Reference Re: ONCA, (fn. 52), para 77. 58 Reference Re: ONCA, (fn. 52), para 114. 59 Ibid. para 161. 53

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provinces,”60 the majority found that this matter “has the singleness, distinctiveness and indivisibility required by the law.”61 Finally, the Courts considered whether the recognition of federal powers to set a 23 minimum price on GHG emissions upset the constitutional balance between federal and provincial powers. The Justice Strathy held that (i) the GGPPA establishes only minimum national standards, leaving room for provincial standards that meet or exceed, (ii) federal jurisdiction is limited to addressing the risks of provincial inaction in the face of a problem that requires cooperative action, and (iii) the GGPPA “strikes an appropriate balance between Parliament and provincial legislatures, having regard to the critical importance of the issue of climate change caused by GHG emissions, the need to address it by collective action, both nationally and internationally, and the practical inability of even a majority of the provinces to address it collectively.”62 Justice Strathy thus affirmed that while the principle of cooperative federalism does not have the power to invalidate an unconstitutional law, it does have the power to support the concurrent operation of statutes enacted by governments at both levels.63 Justice Richards reached a similar conclusion.64 Dissenting judges in both appellate courts took issue with the majority’s finding of 24 constitutional validity.65 In their joint dissent in the Saskatchewan appellate decision, Justices Ottenbreit and Caldwell cautioned against the “pull” of cooperative federalism, asserting that “jurisprudence evinces a strong and explicit admonition that the constitutional division of powers and the maintenance of a constitutional balance between the two orders of government must be respected.”66 By setting clear boundaries, the minority “counters the temptation to approach the POGG analysis from a starting point that, because climate change is a matter of great concern, there must be some way to reconcile the GGPPA with existing Provincial legislation aimed at reducing GHG emissions, in the spirit of cooperative federalism.”67 Rather, the minority opined that the singleness, distinctiveness and indivisibility criteria under POGG relate to matters that “are not mere aggregates of local matters, but those that are clearly identified, particularised and defined in situations where the Provinces are unable to deal with them; matters that have a functional as well as a conceptual singleness and indivisibility”.68 In this regard, Justices Ottenbreit and Caldwell moreover rejected the Attorney 25 General of Canada’s arguments that GHGs are distinct because they are a specific form of pollution defined in the GGPPA and internationally, asserting that there is “nothing qualitatively different about GHGs as a subset of air pollution.”69 They also reasoned that the majority’s narrow description of the purpose of the GPPA as setting “minimum national standards of stringency” of carbon pricing misrepresents its breadth and disguises its impact on “people’s lives and the provincial economy.” The minority suggested that the phrase “is merely a sanitized and unduly-narrow version of ‘the regulation of GHG emissions’, a matter that falls to the Provinces” and that setting 60

Ibid. para 154. Ibid. para 164. 62 Ibid. paras 130–134. 63 Ibid. para 135. 64 Reference Re: ONCA, (fn. 52), paras 156–136. 65 In addition, in the 4–1 majority in the Ontario Court of Appeal, Justice Hoy offered a concurring judgement, agreeing that the law is valid but citing the need for a more specific characterization of the GGPPA as the leading decision “risks an unnecessarily broad impingement on provincial jurisdiction.” Reference Re: ONCA, (fn. 52), para 166. 66 Reference Re: SKCA, (fn. 451), para 396. 67 Ibid. para 396. 68 Ibid. para 415. 69 Ibid. para 428. 61

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“minimum national standards of stringency for pricing GHG emissions” is a stand-in for “the regulation of Provincial GHG emissions pricing”, which threatens to rip out the heart of the division of powers.70 26 Despite finding the first arm of the Crown Zellerbach test not met, Justices Ottenbreit and Caldwell proceeded to address the second step of the test: whether the “scale of impact on provincial jurisdiction…is reconcilable with the fundamental distribution of legislative power under the Constitution.”71 The minority judges agreed with the Attorney General of Saskatchewan’s submissions that the GGPPA is highly intrusive into provincial jurisdiction and “deprives a Province of the ability to regulate GHGs within the Province, to fashion solutions that are sensitive to local needs, and to respond to regional diversities.”72 The minority concluded that the impact of the GGPPA on Provincial jurisdiction is fundamentally irreconcilable with the distribution of powers under the constitution.73 27 In Ontario, Justice Hoscroft authored a dissent in which he disagreed with the majority’s reformulation of Canada’s position, positing that “any matter could be transformed into a matter of national concern simply by adding the word ‘national’ to it.”74 He added that “Federalism concerns seem arid when the country is faced with a major challenge like climate change. As long as something gets done, it may seem unimportant which level of government does it. But federalism is no constitutional nicety; it is a defining feature of the Canadian constitutional order that governs the way in which even the most serious problems must be addressed, and it is the Court’s obligation to keep the balance of power between the levels of government in check.”75 28

Both Ontario and Saskatchewan have appealed to the Supreme Court of Canada. A decision by Canada’s highest court will not only settle the constitutionality of federal competence over carbon pricing in Canada, but will also refine the scope of federal and provincial powers to regulate environmental matters more broadly. As such, these appeals represent an opportunity for the Court to update the framework that will be used for navigating the future of climate concerns in the context of Canada’s federal system.

IV. Litigation relating to the obligation of governments and public bodies to address climate change 1. Cases involving a failure of public bodies to adequately consider GHG emissions 29

There have been two Canadian cases addressing the duty of public bodies to adequately consider GHG emissions in the context of decision-making. In Citizens of Riverdale Hospital v. Bridgepoint Health Services, a citizens group challenged the Ontario Municipal Board’s decision to approve the demolition of a local hospital before the Divisional Court of Ontario.76 In its decision, the Ontario Municipal Board had concluded that environmental concerns regarding the demolition of the hospital had been refuted by the City’s 70

Ibid. para 437. Ibid. para 455. 72 Ibid. para 458. 73 Ibid. para 474. 74 Reference Re: ONCA, (fn. 52), para 229. 75 Ibid. para 198. 76 Citizens for Riverdale Hospital v Bridgepoint Health Services, [2007] O.J. No. 2527, para 4. 71

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experts who conducted “extensive and thorough” consultation and met other criteria addressed in letter and spirit of the applicable legislative framework.77 On appeal, the Citizens of Riverdale Hospital (CRH) maintained that the Board had erred in not considering the City’s objectives and policies regarding the environment and C02 emissions.78 CRH contended that “the Board did not have enough evidence before it on this issue and did not analyze the provisions of the Planning Act in this regard and did not come up with any planning conclusions regarding the goals and objectives associated with these emissions” and that “Bridgepoint’s experts only dealt with emissions from vehicles and ignored the broader picture”.79 CRH emphasized the need for the board to consider the causes and impacts of climate change, given the great public concern about GHG emissions.80 Justice Greer dismissed CRH’s appeal on this ground, finding “no good reason to doubt the correctness of the board’s decision in this regard”81 and concluding that the city and the board had adequately considered the issue. Justice Greer did however emphasize the importance of this issue: “I do, however, agree that the issue of CO2 emission is an important environmental concern to all members of the public, and in particular, those persons who live in the nearby vicinity where the construction and demolition will take place”.82 Leave to appeal this decision was dismissed. In a 2005 case, Pembina Institute for Appropriate Development and Others v. Attorney General of Canada and Imperial Oil, non-profit groups opposed the Kearl Tar Sands Project, a proposed oil sands mine in Northern Alberta to be constructed and operated by Imperial Oil.83 The applicants sought judicial review, alleging that the administrative decision had failed to seriously consider the climate change impacts of the project. The project required authorization from the federal Minister of Fisheries and Oceans including an assessment under the Canadian Environmental Assessment Agency.84 The Panel for the assessment recommended that the Minister approve the project given that “provided proposed mitigation measures and recommendations were implemented, the Project was not likely to cause significant adverse environmental effects.”85 However, the applicants submitted that the environmental assessment conducted did not comply with the mandatory steps in the Canadian Environmental Assessment Act86 (CEAA) and in the panel’s Terms of Reference.87 The CEAA sets out a two-step decision making process: The first step is an environmental assessment where potentially adverse environmental effects of a project are analysed.88 In the second step, the decision-maker taking the assessment into account, if the particular project should be authorized and what follow-up measures, if any, are required to verify the accuracy of the assessment and the effectiveness of mitigation measures.89 The issue at question was “whether the Panel committed reviewable errors by failing to consider the factors enumerated in the CEAA, more particularly by relying on 77

Ibid. para 7. Ibid. para 14. 79 Ibid. 80 Ibid. para 15. 81 Ibid. para 21. 82 Ibid. 83 Pembina Institute for Appropriate Development and Others v. Attorney General of Canada and Imperial Oil, [2008] FC 302, para 3. 84 Ibid. para 5. 85 Ibid. paras 10–12. 86 Canadian Environmental Assessment Act S.C. 1992, c.37. 87 Pembina Institute, (fn. 115), para 2. 88 Ibid. para 14. 89 Ibid. 78

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mitigation measures that were not technically and economically feasible and by failing to comply with the requirement to provide a rationale for its recommendations pursuant to the CEAA”.90 34 In relation to greenhouse gas emissions, the applicants submitted that in determining the Project’s greenhouse gas emissions would cause only “insignificant” adverse environmental effects, without commenting on the effectiveness of intensity-based mitigation.91 Imperial Oil suggested that to comment on the proposed intensity-based mitigation measures would be to overstep the Panel’s jurisdiction into policy recommendations.92 Justice Lamer determined that the Panel’s task to determine the potential adverse environmental effects of the proposed project was of a factual nature, not to engage in policy recommendations: “In the absence of this fact-based approach, the political determinations made by final decision-makers are left to occur in a vacuum.”93 35 The Panel’s obligation under the CEAA is not to comment on each and every detail of the Project, but given the significant amount of greenhouse gases that will be emitted by the Project and the evidence presented that the intensity based targets will not address the problem of greenhouse gas emissions, the judge found it was incumbent upon the Panel to provide a justification for its recommendation on this particular issue. Justice Lamer took issue with the Panel’s dismissal of the project’s the GHG emissions “without any rationale as to why the intensity-based mitigation would be effective to reduce the greenhouse gas emissions, equivalent to 800,000 passenger vehicles, to a level of insignificance.”94 By not providing a realistic and justified plan, the Panel evaded the CEAA’s two-step decision making process. For the Panel’s decision to be informed, it must be grounded in a robust understanding of Project’s effects. Without the clear and cogent explanation of the Panel’s reasoning, deference to the Panel’s expertise is not triggered.95 36 Ultimately, given the absence of an explanation, the Court found that the Panel erred in law by “failing to provide reasoned basis for its conclusion as mandated by s. 34(c)(i) of the CEAA.”96 Given that the error related only to one of the issues that the Panel treated, Justice Lamer allowed the judicial review in part. The matter was remitted back to the Panel to provide a rationale for its conclusion that “the proposed mitigation measures will reduce the potentially adverse effects of the projects greenhouse gas emissions to a level of insignificance.”97

2. Litigation relating to the Kyoto Protocol 37

Canada’s failure to implement its commitments under the Kyoto Protocol and decision to withdraw from the protocol in 2011 have given rise to two cases that invoked arguments based on the government’s duty to comply with the KPIA.

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a) Friends of the Earth v. The Governor in Council and Others. After the federal Minister of the Environment tabled a Climate Change Plan indicating that Canada was not intending to meet its Kyoto targets, Friends of the Earth Canada (FOE Canada) initiated an application for judicial review in 2008 seeking a declaration that the federal government was in violation of the KPIA98. 90

Ibid. para 35. Ibid. para 70. 92 Ibid. para 71. 93 Ibid. para 72. 94 Ibid. para 78. 95 Ibid. para 78. 96 Ibid. para 79. 97 Ibid. para 80. 98 Friends of the Earth v. Canada, 2008 FC 1183, [2009] 3 F.C.R. 201. 91

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FOE Canada alleged that the Minister of Environment had breached its duties under 39 section 5 of the KPIA by failing to prepare a climate change plan to meet Canada’s commitment to the Kyoto Protocol.99 Next, it argued that the Governor in Council had not fulfilled its obligations under sections 8 and 9 to publish proposed regulations in the Canada Gazette and to prepare a statement setting out expected GHG emission reductions from proposed measures.100 Finally, it claimed that the Governor in Council had not respected section 7 of the KPIA, which obliged it to change its regulations within 180 days such that Canada meets its obligations under Article 3.1 of the Kyoto Protocol.101 The federal government responded that these statutory duties were not justiciable because the implementation of the KPIA relied on scientific, public policy, and legislative choices that fall outside the scope of judicial review. They asserted “that their accountability for their failure to fulfil Canada’s Kyoto obligations will be at the ballot box and cannot be in the courtroom.”102 In his decision, Justice Barnes ruled that the KPIA was not justiciable. He began by 40 reiterating that “Justiciability is a question of statutory interpretation directed at identifying Parliamentary intent: whether Parliament intended that the statutory duties imposed upon the minister and upon the Governor in Council by the KPIA be subjected to judicial scrutiny and remediation.”103 Justice Barnes held that while it seems section 5 of the KPIA, “shall prepare a Climate Change Plan” indicates that the preparation of a Climate Change Plan itself may be justiciable, an evaluation of its content is not.104 Moreover, Justice Barnes found that section 7 of the KPIA did not explicitly create a mandatory duty to regulate105 and that it followed that sections 8 and 9 were not justiciable if the Governor in Council simply declined to act.106 Justice Barnes reasoned that the contents of Canada’s climate change plan “are directed at ensuring compliance with Canada’s substantive Kyoto commitments through public, scientific and political discourse, the subject matter of which is mostly not amenable or suited to judicial scrutiny.”107 In 2009, the Federal Court of Appeal affirmed the Federal Court’s decision that the 41 enforcement of the KPIA is not justiciable as “the statutory scheme must be interpreted as excluding judicial review over issues of substantive Kyoto compliance including the regulatory function… Parliament has, with the KPIA, created a comprehensive system of public and parliamentary accountability as a substitute for judicial review.”108 The Supreme Court of Canada refused leave to appeal. This decision should be understood as speaking to the narrow issue of whether the obligation to prepare a climate policy adopted in a climate law like the KPIA can be interpreted as creating justiciable duties relating to the substance of this climate policy. b) Turp v. Minister of Justice and Attorney General of Canada. When Canada gave 42 notice of withdrawal from the Kyoto Protocol in 2011, Daniel Turp, a law professor and politician, sought judicial review of Canada’s decision. He alleged that the federal government’s decision to withdraw from the Kyoto Protocol was illegal, null, and void because it had failed to consult Parliament and the provinces before doing so, thereby 99

Ibid. para 3. Ibid. para 4. 101 Ibid. para 5. 102 Ibid. para 7. 103 Ibid. para 31. 104 Ibid. para 34. 105 Ibid. para 38. 106 Ibid. para 41. 107 Ibid. para 43. 108 Ibid. 100

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breaching the KPIA and the rule of law, the principle of the separation of powers, and the democratic principle.109 Even though Parliament repealed the KPIA after this case was filed, the court considered the applicant’s arguments. The federal government maintained that the decision to withdraw from an international treaty clearly fell to the executive branch of government and that this exercise of the royal prerogative had never before been subject to a duty to consult parliament or the provinces.110 Justice Noël addressed three principal legal issues in his judgement, which speak to the relationship between international law and the powers and prerogatives of the federal government under Canadian constitutional law. First, Justice Noël addressed whether the withdrawal from the Protocol violated the KPIA and the rule of law. Justice Noël reiterated that “[u]nder the royal prerogative, the conduct of foreign affairs and international relations, including the decision to conclude or withdraw from a treaty, falls exclusively under the executive branch of government.”111 Justice Noël concluded that the KPIA did not explicitly impose a justiciable duty to comply with the Kyoto Protocol and did not therefore alter the royal prerogative over foreign affairs.112 As such, Justice Noël held that the government’s decision to withdraw from the Kyoto Protocol did not violate the KPIA, nor the principle of the rule of law. Second, Justice Noël addressed whether the withdrawal from the Protocol violated the principle of separation of powers between the executive and legislative branches. Justice Noël ruled that the separation of powers was not infringed, as the KPIA did not remove the executive’s power to choose whether to withdraw from the Kyoto Protocol. He held that the Government had acted within the royal prerogative, which gives the executive branch the discretionary authority to conduct foreign affairs, including to enter in, and withdraw from, treaties.113 Finally, the judge assessed whether the withdrawal from the Protocol violated the democratic principle, which Turp alleged required the government to consult the House of Commons before withdrawing from the Kyoto Protocol. Having noted that the House of Commons had previously adopted a motion in favour of the ratification of the Kyoto Protocol, Justice Noël held that “the motion passed by the House of Commons was not binding and acknowledged in its content that the power to conclude or withdraw from this treaty still lay with the executive branch.”114 Justice Noël dismissed Turp’s application for judicial review and an application for leave at the Federal Court of Appeal was dismissed in 2019. This decision confirms the prerogatives held by the executive branch over the conduct of foreign affairs in Canadian constitutional law, including with respect to the decision to withdraw from international agreements in the field of climate change.

3. Rights-based climate lawsuits 47

In 2018 and 2019, two lawsuits were launched against the government of Canada and one lawsuit against the government Ontario that allege violations of the human rights of Canadian citizens. In November 2019, Environnement Jeunesse (EnJeu) initiated a class action lawsuit before the Superior Court of Quebec on behalf of all Quebec citizens aged 35 and under against the Government of Canada for climate inaction. EnJeu argues that the Canadian government’s decision to adopt inadequate climate targets that are likely to 109

Turp v. Minister of Justice and Attorney General of Canada, FC 893, para 13. Ibid. para 14. 111 Ibid. para 18. 112 Ibid. para 26. 113 Ibid. para 28. 114 Ibid. para 31. 110

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lead to global warming exceeding the 2 degree threshold and its repeated failures to meet these targets are “grossly inadequate, irresponsible, negligent and wrongful.”115 By failing to put in place the necessary measures to limit global warming, EnJeu alleges that Canada has breached the fundamental rights of Quebec youth, including their right to life and security under section 7 of the Canadian Charter of Rights and Freedoms and section 1 of the Quebec Charter of Rights and Freedoms; their right to live in a healthful environment in which biodiversity is preserved under section 46.1 of the Quebec Charter; and their right to equality under section 15 of the Canadian Charter and section 10 of the Quebec Charter. EnJeu asks the Court to order Canada to “cease its infringements of the fundamental rights of the members of the group” and punitive measures, that would come in the form of “remedial measures to help curb global warming, as well as any other relief that the Tribunal considers appropriate to impose on Canada in order to ensure compliance with fundamental rights of the putative group members.”116 This case has already given rise to a decision on the certification of the class action 48 lawsuit initiated by EnJeu. In his decision, Justice Morrison reiterated that “[t]he authorization of a class action is a filtering step. The Applicant bears a burden of demonstration, also described as a burden of logic, not one of evidence. It must establish a good colour of right, a prima facie right or a defensible cause.”117 Furthermore, he stated “the composition of the group must justify a class action in comparison with individual actions, the Quebec legislator wanting to facilitate access to justice by avoiding procedural redundancy.”118 Despite acknowledging the recognized urgency of environmental protection as “a fundamental value in Canadian society,”119 and recognizing that “the mission and objectives of Jeunesse are admirable on the socio-political level,”120 Justice Morrison found that the importance of the issue did not in of itself justify the authorization of the class action lawsuit. While EnJeu explained that the youngest residents of Quebec stand to suffer most the 49 effects of climate change, disproportionately infringing their human rights, Justice Morrison concluded that EnJeu had not provided sufficient factual or rational grounds for its proposed class.121 On the upper limit of the class, Justice Morrison declared that the 35-year upper limit on the age of the class was “arbitrary” and therefore inappropriate.122 Judge Morrison questioned, “Why choose 35? Why not 20, 30 or 40? Why not 60?”123 As to the lower limit, Justice Morrison noted EnJeu “can give a ‘voice’ to young people, but it does not have the authority to change the legal status and powers of minors”124 and that “acting in the manner suggested by ENJEU is not in the best interest of Quebec minors.”125 Judge Morrison noted that the age of majority in Quebec is 18, and that the members of the class would have to be 18 or older so not as to implicate children or place an unwelcome burden on their parents. This latter finding is

115 Environnement Jeunesse c Procureur général du Canada, 2019 QCCS 2885, para 13. (translation produced by the authors). 116 Ibid. para 3. 117 Ibid. para 25. 118 Ibid. para 30. 119 Ibid. para 108. 120 Ibid., para 136. 121 Ibid. para 117. 122 Ibid. para 123. 123 Ibid. para 119. 124 Ibid. para 136. 125 Ibid. para 133.

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especially puzzling considering the many class action cases that have been authorized in Quebec that include minors.126 Finally, Justice Morrison declared that a class action lawsuit was an unnecessary and an inappropriate procedure in this case given that “a single application by one person would have the same effect of all Quebec residents, if not all Canadians.”127 It is worth noting that Justice Morrison’s decision appears at odds with the liberal approach to the certification of class actions in Quebec civil law.128 Furthermore, it also inconsistent with the body of scientific research on the impacts of climate change for the health and safety of children129 as well as the decisions adopted states within the UNFCCC and the United Nations Human Rights Council, which recognize that children are one of the groups whose rights will be disproportionally affected by the impacts of climate change.130 In his decision, Judge Morrison also addressed whether EnJeu’s arguments were prima facie justiciable. While noting that the EnJeu’s arguments appear directed at the executive branch of government, he reasoned that “in the case of an alleged violation of the rights guaranteed by the Canadian Charter, a court should not decline jurisdiction on the basis of the doctrine of justiciability”131 and that a Court should not refuse to adjudicate because of the political context or implications of the issue.132 Moreover, Justice Morrison emphasized the need for a liberal interpretation of the Canadian Charter and drew on jurisprudence to confirm the executive branch’s obligation to act in accordance with the Charter.133 While Justice Morrison recognized the political aspect of the issues raised by EnJeu, he nonetheless concluded that where Charter violations are concerned, the Court is within its jurisdiction to pronounce on those issues. Judge Morrison determined “that the doctrine of justiciability is not, in this case, an obstacle to the authorization of the class action that Jeunesse seeks to pursue.”134 EnJeu has appealed Justice Morrison’s decision to not authorize its class action before the Quebec Court of Appeal. The federal government has also launched a cross-appeal against Justice Morrison’s findings relating to justiciability. An appellate decision should be rendered at some point in 2020. Two other rights-based climate cases were filed on behalf of children and youth in the fall of 2019. In Larose et al, a group of children and teenagers have filed a case in Federal Court seeking declarations that the government of Canada has infringed their rights guaranteed under sections 7 and 15 of the Charter135 as well as its common law duty and constitutional obligation “to protect the integrity of common natural resources 126 A c. Watch Tower Bible and Tract Society of Canada, 2019 QCCS 729, paras 127–131, 151; Coalition contre le bruit c. Shawinigan (Ville de), 2012 QCCS 5574, paras 25–32; Major c. Zimmer inc., 2016 QCCS 3093, para 64; Pontbriand c. Québec (Procureur général), 2004 CanLII 16852 (QCCS), paras 1,16; Québec (Curateur public) c. Syndicat national des employés de l’hôpital St-Ferdinand, [1996] 3 RCS 211. 127 Environnement Jeunesse, (fn. 115), para 141. 128 See, e.g., Vivendi Canada inc. v. Dell’Aniello, 2014 SCC 1; Asselin v. Desjardins Cabinet de services financiers inc., 2017 QCCA 1673. 129 For an overview of key findings relating to the consequences of climate change for children, see: Gibbons, Climate Change, Children’s Rights, and the Pursuit of Intergenerational Climate Justice, Health and Human Rights Journal 16, no. 1 (2014): (1–18); Office of the High Commissioner for Human Rights, “Analytical study on the relationship between climate change and the full and effective enjoyment of the rights of the children,” UN Doc, A/HRC/35/13 (2017). 130 See, e.g., UNFCCC COP, Paris Agreement, at preamble; UN Human Rights Council resolution 32/ 33, “Human Rights and Climate Change,” UN Doc. A/HRC/RES/32/33 (2016). 131 Environnement Jeunesse, (fn. 147), para 56. 132 Ibid. para 58. 133 Ibid. paras 65–66. 134 Ibid. para 87. 135 La Rose v. Her Majesty the Queen, 2019 T-1750-19, para. 6.

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that are fundamental to sustaining human life and liberties.”136 They allege that “[d] espite knowing for decades that GHG emissions cause climate change and disproportionately harm children, the defendants continue to cause, contribute to and allow GHG emissions that are incompatible with a stable climate capable of sustaining human life and liberties.”137 They seek an order that the government be required to elaborate and implement “an enforceable plan that is consistent with Canada’s fair share of the global carbon budget necessary to achieve GHG emissions reductions consistent with the protection of public trust resources subject to federal jurisdiction and the plaintiffs’ constitutional rights.”138 In Mathur et al, a group of youth have filed an application before the Ontario 54 Superior Court for judicial review of the government of Ontario’s decision to set a target for reducing its GHG emissions by 30 % below 2005 levels by 2030, an objective that is inconsistent with climate science and the objective of the Paris Agreement.139 In doing so, the applicants specifically argue that the rights to life under the Charter includes the right to a stable climate system that can sustain life for youth and future generations. They seek, inter alia, declarations that Ontario’s target violates their rights under sections 7 and 15 of the Charter, an order invalidating the repeal of a previous climate law that made the adoption of this inadequate target possible, and an order mandating the government of Ontario to set a new GHG emissions reductions target that is consistent with Ontario’s share of global emissions and necessary to limit global warming to 1.5 degrees above pre-industrial temperatures.140 Taken together, these three cases represent an important turn in the field of climate 55 litigation in Canada and reflect the growing role of children and youth in climate advocacy and the importance of human rights for addressing the climate crisis.

V. Conclusion Three important themes emerge from our review of climate cases in Canada that may 56 speak to broader trends and developments in this burgeoning field. First, experiences in Canada confirm that climate change as a problem and efforts to address it have given rise to an increasing number of climate cases. As we have shown above, lawsuits have been initiated against government bodies due to their failure to take action on climate change as well as because they have sought to do so. In either case, courts have consistently upheld the role and authority of the federal government in tackling the climate crisis. Canada’s increasing, yet still underwhelming efforts to reduce its carbon emissions and the projected impacts of climate change suggest that climate change is likely to give rise to further climate litigation. Second, many of the climate cases filed in Canada reflect the complex multi- 57 jurisdictional nature and transnational dimensions of climate law and governance. For one thing, many cases have dealt with the division of powers in Canada and how it should apply to a problem whose causes and effects engage and cut across the authority, competences, and jurisdictions of federal and provincial governments. For another, the three rights-based cases recently launched build on and emulate cases initiated else-

136

Ibid. para 7. Ibid. para 3. 138 Ibid. para. 3. 139 Mathur, et al. v. Her Majesty the Queen in Right of Ontario, 2019 CV-19-00631627. 140 Ibid. para 8. 137

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where, principally the Urgenda case in the Netherlands and the Juliana case in the United States. 58 Third, court decisions addressing matters relating to climate change have generally acknowledged the importance of addressing the climate crisis. For instance, at the outset of its advisory opinion, a majority of the Saskatchewan Court of Appeal affirmed that “climate change caused by anthropogenic greenhouse gas [GHG] emissions is one of the great existential issues of our time.”141 Even when Canadian courts have dismissed challenges to a government body’s failure to adequately consider or address climate change, they have done so on the basis of preliminary grounds, such as justiciability or the certification of a class action, have recognized climate change as an issue of paramount significance, and have left the door open for future cases to be launched in this field. 141

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Reference Re: SKCA, (fn. 48), para 4.

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M. 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Part 4. Climate change litigation – National reports PUBLICA 2008, available at http://www.scielo.br/pdf/rsp/v42n2/en_6804.pdf (accessed on: 01/01/ 2019); Ruscus/Edens/Gray, Government Purchasing of Efficient Products and Renewable Energy, in: Gerrard (ed.), The Law of Clean Energy: Efficiency and Renewables 2011, p. 117–138; Sandel, What Money Can’t Buy. The Moral Limits of Markets, Farrar, Strauss e Giroux 2012; Sandel, Liberalism and the Limits of Justice, Cambridge University Press 1998; Sarlet/Fensterseifer, Direito Constitucional Ambiental, Constituição, Direitos Fundamentais e Proteção do Meio Ambiente, Revista dos Tribunais 2014; Shiva, Water Wars: Privatization, Pollution and Profit, in: Schmidtz/Willott (eds.), Environmental Ethics: What Really Works, Oxford University Press 2012, p. 217–220; Stiglitz, The Great Divide: Unequal Societies and What We Can do About Them, Norton & Company 2015; Stiglitz, The Price of Inequality, Penguin Books Ltd. 2013; Sunstein/Thaler, Nudge: Improving Decisions about Health, Wealth and Happiness, Yale University Press 2008; The New York Times, Pope Synod Amazon, available at https://www.nytimes.com/reuters/2019/10/27/world/americas/27reuters-pope-synod-amazon.html (accessed on: 1/11/2019); United Nations, The Status of Climate Litigation: a Global Review, 2017, available at https://www.unenvironment.org/resources/publication/status-climate-change-litigation-global-review (accessed on: 01/30/2019); United Nations, Climate Change Conference: Cop24, 2018, available at http://www.cop24.katowice.eu/ (accessed on: 1/5/2019); Wedy, Climate Change and Sustainable Development in Brazilian Law, 2016, available at https://web.law.columbia.edu/sites/ default/files/microsites/climate-change/files/Publications/Collaborations-Visiting-Scholars/wedy_-_cc_ sustainable_development_in_brazilian_law.pdf (accessed on: 1/20/2019); Wedy, Climate Legislation and Litigation in Brazil, 2017, available at http://columbiaclimatelaw.com/files/2017/10/Wedy-201710-Climate-Legislation-and-Litigation-in-Brazil.pdf (accessed on: 1/20/2019); Wedy, Sustainable Development and the Brazilian Judge, 2015, available at https://web.law.columbia.edu/sites/default/files/ microsites/climate-change/wedy_-_sustainable_development_and_brazilian_judges.pdf (accessed on: 1/20/2019); Wedy, Litígios Climáticos: de acordo com o direito brasileiro, norte-americano e alemão, Juspodivm 2019; Wedy, Desenvolvimento Sustentável na Era das Mudanças Climáticas: um Direito Fundamental, Saraiva 2018; Wiener, Precaution and Climate Change, in: Carlarne/Gray/Tarasofsky (ed.), The Oxford Handbook of International Climate Change Law, Oxford University Press 2016, p. 163–184; World Wildlife Fund, Living Planet Report 2018: Aiming higher, available at https://wwf. panda.org/knowledge_hub/all_publications/living_planet_report_2018/ (accessed on: 2/20/2019).

Contents Introduction ..................................................................................................... Climate change law and litigation in Brazil.............................................. Legal remedies which may be used in climate litigation in Brazil ...... Climate litigation in Brazil: analyses of cases........................................... 1. Precedent of the Supreme Federal Court.............................................. 2. Precedents by the Brazilian Superior Court of Justice....................... V. Conclusion........................................................................................................

I. II. III. IV.

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I. Introduction Over the last decades, international treaties, constitutions, statutes and public policies have addressed human-induced climate change as a major challenge to be faced, whether for the need to cut off greenhouse gas emissions under the parameters agreed in Paris, in 2015, or for the immediate need to adopt resilience measures to protect human and non-human life, and the environment, as well as the economy and the public and private assets. This normative framework, combined with a recent doctrine and, especially, jurisprudence, has created rights and obligations for Governments and private entities that go beyond the boundaries of environmental law. The importance of climate litigation, by the way, remains clear, especially as it is described in the objective 13 of the UN Agenda 2030 for sustainable development, embodied in the necessary “climate action”. Climate action presupposes, as one of its main concrete elements, climate litigation. 2 Impacts generated by heat waves and large storms have reached the Brazilian coast and, it is paramount to state that their incidence is increasing, both in frequency and in 1

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intensity, and that they are caused by human intervention. In the Brazilian case, they are caused especially due to the deforestation and uncontrolled farming activity that employ rudimentary and outdated techniques, such as burning. The costs generated for the government, for society and for the companies in virtue of these extreme weather events, are significant. Brazil has failed to develop effective instruments to fight the causes and effects of global warming (negative externalities). In this scenario of uncertainties and risks, which become a lot broader in virtue of the sceptical discourse of the Bolsonaro government regarding climate change, it is vital to seek climate stabilization at levels that do not exceed an increase of 2.0°C and that are closer to 1.5°C by 2100, as already agreed in the scope of COP 21, with the initial milestone being the pre-Industrial Revolution period (1750). In fact, Brazil is a signatory of this agreement and cannot abandon it before 2020, a fortiori after the drafting of the rules book for the fulfilment of the Paris Agreement at COP 24, held in Katowice, in 2018.1 The Brazilian government, furthermore, cannot ignore the UN climate report, Global Warming of 1.5°C, which demonstrates that the world has already surpassed the 1 °C heating barrier compared to the pre-industrial levels, and that humans and non-humans are experiencing the negative effects of climate change. Events such as hurricanes in the USA, unprecedented tornadoes in Asia, and water crises in major metropolis, droughts in Europe and unusual fires in the Arctic tundra regions have all been seen in recent years.2 According to the report, the average temperature of the planet’s surface rose about 0.6 °C since the end of the 19th century, with 95 % confidence that humans are the main cause of the current global warming. This change is mainly caused by the increase in carbon dioxide (CO2) and other greenhouse gases. CO2, as mentioned above, is released by deforestation and burning of fossil fuels, as well as by natural processes such as breathing and volcanic eruptions. Another striking finding is that, since the temperature measurements started, 17 of the 18 hottest years on record have been on the 21st century.3 If global warming follows the current rate, global average temperatures will reach heights of 1.5°C between 2030 and 2052. To limit warming to 2°C up to 2100 it will be necessary to cut down greenhouse gas emissions by 20 % until 2030, compared to 2010 levels, and to zero emissions by 2075. In this context, the most complete and innovative report on climate litigation in the world, published by the United Nations Environment Programme, was elaborated in cooperation with the Sabin Center for Climate Change Law (Columbia Law School) led by Professor Michael B. Gerrard, and released in May 2017. According to the report, the largest occurrences of climate litigation occur in developed countries in the northern Hemisphere, Australia, and New Zealand. In the southern hemisphere, plaintiffs are establishing climate litigation4, although there is no consistent doctrine at the local level, especially in Brazil, in order to serve as a reference or a precedent. Hence, facing a need for a greater development of the theoretical framework, an investigation on the climate litigation phenomenon will be conducted under the Brazilian legal system from precedents of the Superior Courts. 1 United Nations, Climate Change Conference: Cop24, 2018, available at http://www.cop24.katowice. eu/ (accessed on: 1/5/2019). 2 Intergovernmental Panel on Climate Change (IPCC), Global Warming of 1.5°C, 2018, available at http://www.ipcc.ch/report/sr15/ (accessed on: 2/22/2019). 3 IPCC, supra (fn. 2). 4 United Nations, The Status of Climate Litigation: a Global Review, 2017, available at https://www. unenvironment.org/resources/publication/status-climate-change-litigation-global-review (accessed on: 01/ 30/2019), p. 5.

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In such context, it is important to note that according to the report, The Status of Climate Litigation: a Global Review5, there are three main categories of legal issues that are discussed in terms of worldwide climate litigation: 1. Possibility of the controversy being filed, discussed and decided by the Judicial System; 2. Sources of climate obligations; 3. Useful procedural tools to file for climate litigation. 10 Moreover, it cannot be ignored that there are five trends in climate litigation when analysing their main characteristics6: 1. Holding governments to their legislative and policy commitments; 2. Linking the impacts of resource extraction to climate change and resilience; 3. Establishing that particular emissions are the proximate cause of particular adverse climate change impacts; 4. Establishing liability for failures (or efforts) to adapt to climate change; 5. Applying the public trust doctrine to climate change. 11 The issues mentioned here will be critically dealt with in this chapter, having as background the Climate Change Law and the climate litigation already decided or in progress in Brazil. The text shall be developed based on International Law, Brazilian Constitution, statutes, administrative acts, jurisprudence, and doctrine that are slowly being built in the country. 9

II. Climate change law and litigation in Brazil According to the Brazilian government, deforestation in the Amazon rainforest has increased by 16 % between August 2014 and July 2015.7 However, according to an independent source, February 2015 had a 282 % increase in deforestation in the Amazon rain forest compared to February 2014.8 Since 1970, deforestation has reduced 20 % of the Amazon rainforest and 50 % of the Cerrado (vegetation of the Brazilian interior), important biomass in Brazil.9 13 In 2016, Brazil’s emissions of greenhouse gas (GHG) reached 2.2 gigatons, which represents an increase of 9 % in relation to the previous year. This is the highest level since 2008 and the highest elevation seen since 2004. Half of these emissions are in the land use sector, where deforestation is the main source of emissions, followed by agriculture, energy, industrial processes and finally energy and waste. This makes Brazil the world’s seventh largest greenhouse gas (GHG) emitter, if the European Economic Community (EEC) is considered as a group. If it is not considered, the country then falls to the sixth position.10 12

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United Nations, supra (fn. 4), p. 5. IPCC, supra (fn. 2), p. 14. 7 Girardi, Desmatamento na Amazônia aumenta 16 % em um ano, Estadão 2015, available at http:// sustentabilidade.estadao.com.br/noticias/geral,desmatamento-na-amazonia-sobe-16-em-um-ano-e-atinge5831-km,1802729 (accessed on: 01/20/2019). 8 O Globo, Desmatamento da Amazônia aumentou 282 % em um ano, 2015, available at http://oglobo. globo.com/sociedade/sustentabilidade/desmatamento-da-amazonia-aumentou-282-em-um-ano-15653073# ixzz3v6bfxBZ3 (accessed on: 1/20/2019). 9 World Wildlife Fund, Living Planet Report 2018: Aiming higher, available at https://wwf.panda.org/ knowledge_hub/all_publications/living_planet_report_2018/ (accessed on: 2/20/2019). 10 Instituto Clima e Sociedade, Desafios para o Brasil, available at https://www.climaesociedade.org/ desafios-para-o-brasil-1 (accessed on: 1/5/2019). 6

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Emissions growth is the second in a row, amid the worst recession in Brazilian history. In 2015 and 2016, the cumulative increase in emissions was 12.3 % against a reduction of 7.4 points in GDP (Gross Domestic Product), which fell by 3.8 % in 2015 and 3.6 % in 2016. Brazil thus becomes the only great economy in the world to increase pollution without generating wealth for its society.11 The increase in emissions in 2016 was directly related to the 27 % increase in deforestation in the Amazon rain forest. Emissions from land use change showed a rise by 23 % in that year, accounting for 51 % of all greenhouse gases that Brazil released into the atmosphere. On the other hand, almost all other sectors of the economy had a decrease in emissions. The most significant one was in the energy sector, which saw a decline of 7.3 % – the largest drop in a year since the start of the historical series in 1970. The industrial processes sector had a reduction of 5.9 % and that of waste, 0.7 %. Emissions from agriculture and livestock, in turn, rose by 1.7 %.12 The country also has a strong economy still based on fossil fuels and few budgetary and scientific investments in renewable energies. Brazilian option for transportation on wheels has led to an increase in emissions from the exhaust of cars, buses, and trucks. Burning diesel is the largest carbon dioxide emissions source in transport. Government support for the fossil fuel industry is a serious problem for cutting down emissions. Diesel’s emissions are also growing faster than gasoline’s.13 In August 2019, 886 square kilometres of deforestation in the Legal Amazon area were detected, according to the Deforestation Alert System (SAD). Compared to the same month in the previous year, this figure represents a 63 % increase. In 2018, 545 square kilometres of deforestation were recorded. The data are even more alarming when burnings and logging are taken into account, in an index called “degradation”. In this scenario, 922 square kilometres were computed, a 675 % increase compared to August in the previous year (2018), which registered 19 square kilometres. The State of Mato Grosso accounts for 45 % of this total and Pará accounts for 42 %. The entity responsible for reviewing the SAD data is the Amazon Institute of Man and Environment (Imazon). There are, technically, according to Imazon, differences between both indexes. Deforestation is characterized as the process of total and permanent destruction of a green area. Most of the times, it is important to note that this forest is converted into areas of pasture. Degradation is characterized by the shallow and selective logging, usually for the purposes of selling the wood. Examples of degradation are forest fires, often used to open clearings.14 In July (2019), INPE – the National Institute of Special Research, a federal agency acknowledged worldwide, reported an increase of 278 % in the deforestation alerts in the Amazon.15 It was extremely serious that these and other data about deforestation in the Amazon raised by INPE, based on accurate satellite images, have been discredited by the government, eventually resulting in the termination of the head of the referred agency. Moreover, such fact resulted in criticism from the director of the Biospheric Sciences Laboratory at the Space Flight Center of NASA, Douglas Morton, stating that 11

Instituto Clima e Sociedade, supra (fn. 10). Instituto Clima e Sociedade, supra (fn. 10). 13 Instituto Clima e Sociedade, supra (fn. 10). 14 Onze de Maio, Degradação da Amazônia cresce 675 em Agosto e desmatamento aumentou 63 %, available at https://www.onzedemaio.com.br/rba-degradacao-da-amazonia-cresce-675-em-agosto-desmatamento-aumentou-63/ (accessed on: 1/11/2019). 15 O Globo, Alertas do Inpe sobre desmatamento na Amazônia aumentam 278 %, available at https:// oglobo.globo.com/sociedade/alertas-do-inpe-sobre-desmatamento-na-amazonia-crescem-278-em-julho23857095 (accessed on: 1/11/2019). 12

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“the termination of Ricardo Galvão from the command of INPE is significantly alarming, as it reflects how the current Brazilian government looks at science”.16 As a matter of fact, in certain aspects our governmental policy is obscurantist and driven by harmful biases. The scenario, as it may be seen, is worrisome, it is far from the perspective of the current Brazilian government complying with the Paris Agreement and the 2030 Agenda for Sustainable Development. Apropos, it is worth recalling that sustainable development is a constitutional principle according to a leading case of the Supreme Federal Court.17 There is no political convergence of the government and some segments of the extreme right-wing, radical and, above all, uninformed, with the scientific postulates of Laudato Sì and that question the noble and ecological purposes of the Vatican Synod for the Amazon, instituted by Pope Francis in 2019.18 In the worst-case scenario, environmental degradation and deforestation may have a dramatic negative financial impact of US$ 5 trillion for Brazil until 2050. This is the situation where governance is weakened at the most, deforestation explodes and the Country has to buy carbon credits abroad in order to do its part in the global efforts of reducing the emissions of greenhouse gases. This was the exact conclusion reached by 10 prominent Brazilian researchers in paper published in the Nature Climate Change, one of the most renowned scientific publications about climate change.19 Participation of wind20 and solar energy is, on the other hand, very small when compared to developed countries, especially Nordic countries. It is up to the Brazilian State to turn this game around and choose sustainability, as suggested by Nobel Prizes in Economics in 2018, William Dawbney Nordhaus and Paul Michael Romer, who have theses committed to sustainable development21 essential to the present and, especially, future generations. Economic damage caused to nations by global warming is evident, as illustrated by the recently issued report of 13 US federal agencies that have found that the US economy shall decline by 10 % until the end of the century due to global warming.22 In this context, it is important to note that, with many omissions and technical imperfections, Brazilian Act 12,187/09 created the National Policy on Climate Change (PNMC, in the Brazilian Portuguese abbreviation). It must be implemented wherever possible, supplying its evident omissions, complementing it. The most effective instruments for combating climate change are far from being implemented but need to be established, such as carbon taxation and the cap-and-trade.23

16 Barrucho, Demissão do Chefe do Inpe é alarmante segundo diretor da Nasa, BBC News Brazil, 7 August 2019, available at https://www.bbc.com/portuguese/brasil-49256294 (accessed on: 1/11/2019). 17 Brazil, Supreme Federal Court, case ADI-MC 3540/2009. 5.5.2009. Justice Celso de Mello. 18 The New York Times, Pope Synod Amazon, available at https://www.nytimes.com/reuters/2019/10/ 27/world/americas/27reuters-pope-synod-amazon.html. Accessed on: 1/11/2019. 19 Chiaretti, Retrocesso Ambiental pode custar 5 trilhões ao Brasil até 2050, Valor, 10 July 2018, available at https://www.valor.com.br/brasil/5647915/retrocesso-ambiental-pode-custar-us-5-tri-ao-brasil-ate-2050diz-estudo?fbclid=IwAR1Cx9jSMxzW0hyaEEMvW7lEabIu70lX3vmKOGJUOST2XqaPDIyy9USKXjA (accessed on: 1/11/2019). 20 About the benefits of wind energy and its regulation in the United States, see Firestone/Kehne/Wind, in: Gerrard (ed.), The Law of Clean Energy: Efficiency and Renewables, 2011. p. 361–368. 21 Appelbaum, 2018 Nobel in Economics is Awarded to William Nordhaus and Paul Romer, The New York Times, 8 October 2018, available at https://www.nytimes.com/2018/10/08/business/economicscience-nobel-prize.html (accessed on: 1/10/2019). 22 Davenport/Pierre-Louis, U.S. Climate Report Warns of Damaged Environment and Shrinking Economy, The New York Times, 23 November 2018, available at https://www.nytimes.com/2018/11/23/ climate/us-climate-report.html (accessed on: 1/10/2019). 23 Wedy, Climate Change and Sustainable Development in Brazilian Law, 2016, p. 18, available at https:// web.law.columbia.edu/sites/default/files/microsites/climate-change/files/Publications/Collaborations-Visiting-Scholars/wedy_-_cc_sustainable_development_in_brazilian_law.pdf (accessed on: 1/20/2019).

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The principle of sustainable development has been expressly accepted by Act 12,187/ 2009, which instituted the National Policy on Climate Change. The law, although with such imperfections and abstractions, is a considerable step forward in combating climate change and global warming.24 This act clearly absorbed the concept of international diplomas on environmental protection, which is, in fact, extremely positive. The legislation was regulated by Decree 7390/2010 (replaced by Decree 9,578/2018), which provided, amongst other important issues, the base line of emissions of greenhouse gases for 2020 to be estimated in 3.236 Gt-CO2-eq. Thus, the corresponding absolute reduction was established between 1.168 Gt-CO2-eq and 1.259 GtCO2-eq, 36.1 % and 38.9 % emission decrease, respectively. Brazil, however, has committed, before the United Nations Conference of Agenda 2030 for Sustainable Development, held in New York in September 2015, to present reductions of 37 % by 2025 and of 43 % until 203025, exceeding the numbers established in the decree. It remains to be seen, of course, if the country will have structure, technical capability, and political integrity to achieve such challenging goal. Brazilian Act 12,187 establishes principles, objectives, guidelines and instruments of the PNMC (National Policy on Climate Change) (article 1). The act determines, among other objectives, that there must be compatibility of economic and social development with protection of the climate system (article 4, inc. I). There is a crucial link between the economy, human dignity, good governance, environment and low carbon emissions.26 In the official document, the PNMC instruments remain. Among them, the National Plan on Climate Change, the National Fund on Climate Change and, in particular, the evaluation of environmental impacts on microclimate and macroclimate (article 6, subsections I to XVIII). Moreover that the Brazilian legislation provides financing and credit mechanisms for production of clean energy.27 The PNMC and its actions, carried out under the responsibility of political entities and public administration bodies, shall comply with “the principles of precaution, prevention, citizen participation, sustainable development and common but differentiated responsibilities in the international sphere” (article 3)28. The PNMC objectives should be in line with “sustainable development in order to pursue economic growth, eradicate poverty and reduce social inequalities” (article 4, sole paragraph). The expres24 The omissions and imperfections of the Act of the Brazilian National Policy of Climate Change, see Wedy, supra (fn. 23). Regarding climate change and regulation, the National Policy of Climate Change is complemented by the Act no. 12,305/10, which institutes the National Policy of Solid Waste (PNRS); the Act 13,123/2015 and the Decree 8772/2016, which regulate biodiversity. 25 Associated Press, 2015, Brazil Pledges to Cut Carbon Emissions 37 % by 2025, The Guardian, 28 September 2015, available at www.theguardian.com/environment/2015/sep/28/brazil-pledges-to-cutcarbon-emissions-37-by-2025 (accessed on: 1/30/2019). 26 Wedy, Desenvolvimento Sustentável na Era das Mudanças Climáticas: um Direito Fundamental, 2018. 27 Examples and suggestions of more comprehensive models of financing and credit for production of renewable energy that could well serve for Brazil, see Ruscus/Edens/Gray, in: Gerrard, The Law of Clean Energy: Efficiency and Renewables, 2011, 117–138. 28 Wiener mentions, in carrying out the necessary link between the application of the precautionary principle and climate change, that precaution is understood not as a binary formal classification but a general stance. And the lack of precautionary measures adopted in the past to combat climate change do not mean that precautionary measures are unavailable or can not be presently adopted. There is an opportunity to adopt precautionary measures in the medium term that shall reduce future damage. And, in the meantime, it is important to assimilate good experiences and construct effective ways to design climate policies that yield the greatest benefits at lower costs. Also, according to the author, it is possible to improve and learn about the adoption of precautionary measures while adopting temporary administrative acts (such as adaptive regulations): Wiener, in: Carlarne/Gray/Tarasofsky (eds.), The Oxford Handbook of International Climate Change Law, Oxford University Press 2016, p. 163–184.

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sion economic development, rather than growth, would be better employed, since economic growth, as is known, does not necessarily mean development, since such growth may be unequal, polluting, disorderly and concentrating income, which is incompatible with the fundamental right to sustainable development.29 The act should be prioritized, even with the development of an autonomous article, the two mechanisms considered the most effective in combating greenhouse gas emissions: carbon taxation and the adoption of cap-and-trade emission permits. The taxation on carbon has the advantage of making emissions more expensive for all; capand-trade, in turn, like the whole market, presents flaws and imperfections. Taxation on carbon can affect the whole society; the cap-and-trade system directly affects only the productive sector. An ideal scenario would be the combined implementation of these measures in the Brazilian case. There is a semblance of these solutions in two points of the act. First, when the act provides, in its article 9, that the Brazilian Emission Reduction Market (MBRE, in the Brazilian Portuguese abbreviation) shall be operationalized in commodities and futures exchanges, stock exchanges and over-the-counter (OTC) entities, authorized by the Securities and Exchange Commission of Brazil (CVM, in the Brazilian Portuguese abbreviation), where trading of securities representing emissions of certified greenhouse gases shall take place. As we can see, in the years since the act was issued, this market in Brazil is nonexistent. The country is far from creating cap-and-trade market in the style of those in full operation in the European Union, the United States, Canada, and China.30 The great advantage of this market is that, in full operation, it encourages companies to reduce emissions to reduce costs. The lower the emissions and the increase the use of clean energy, the greater the companies’ profits shall be. As emissions increase, companies would have to use the market to buy more emissions permits, increasing costs and lowering profits. It is a nudge to stimulate the production of clean and more lucrative energy, using the market of authorizations of carbon emissions.31 There is a strong moral objection to the market for carbon emissions permits. One puts a price on something that cannot be bought or marketed: pollution. People cease to pollute not because they are acting by the virtue of behaving well but for more profit. According to this objection, one should follow the categorical imperative that the right is not to pollute because it harms other people and environmental assets.32 This maxim should be adopted as an a priori moral principle and not as a utilitarian view that it is more profitable not to pollute. That is, one does the right thing, the fight against pollution, but for the wrong reason, which is aiming profit. This utilitarian reasoning can have as a deleterious consequence the violation of the maxim of social solidarity and

29 Disastrous economic growth with inequality, see Stiglitz, The Great Divide: Unequal Societies and What We Can do About Them, 2015; Stiglitz, The Price of Inequality, 2013. 30 China has announced its cap-and-trade program, which aims to limit emissions from power plants, in steel and cement and paper industries, see Davis/Hirschfeld/Davenport, China to Announce Cap-andTrade Program to Limit Emissions, The New York Times, 24 September 2015, available at http://www. nytimes.com/2015/09/25/world/asia/xi-jinping-china-president-obama-summit.html?_r=1 (accessed on: 01/02/2019). 31 Sunstein/Thaler, Nudge: Improving Decisions about Health, Wealth and Happiness, Yale University Press 2008. 32 Goods that money can not buy and moral objections, see Sandel, What Money Can’t Buy. The Moral Limits of Markets, 2012. A deeper and more critical way to utilitarianism, defending moral validators to liberalism as limits of justice, see also Sandel, Liberalism and the Limits of Justice, 1998.

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of the moral principle of non-polluting. The market for carbon emissions permits would therefore be contaminated by efficiency in despising a priori moral principles.33 In reality, within a pragmatic vision, the market for permits for carbon emissions has 34 worked in several countries – albeit with imperfections – and it is an alternative to be considered in the fight against climate change in a society ruled by constitutional right provisions for respect to free enterprise as a principle of economic development and private property as a fundamental right. It is important to adopt a pragmatic and supportive attitude, with ethical and moral reservations, but without prejudices based on heuristics and intuitions34, with cap-and-trade as an alternative to the atmosphere decarbonisation. Regarding specifically carbon taxation, the most effective means for combating climate change, nothing was mentioned by the legislator. It is important, however, that Brazil boldly move forward in this area to effectively combat climate change and at the same time stimulate a green economy that shall benefit both present and future generations.35 The law establishing the Brazilian PNMC is a breakthrough, without question. It also 35 has omissions and inaccuracies and does not constitute, if analysed in isolation, a legal framework that is sufficient and structured in good technique for the establishment of climate litigations. It is a legal document that serves, in spite of the criticisms presented here, as a guideline for public and private sectors for the beginning of an efficient regulation on greenhouse gas emissions and especially for starting a speech that is a consistent legal framework – which must be constructed in combination with the constitutional text, doctrine and jurisprudence – and exercising climate litigation of good technical level in Brazil.

III. Legal remedies which may be used in climate litigation in Brazil Everyone has the right to an ecologically balanced environment, in accordance with 36 the Brazilian Federal Constitution, being an asset for common use by the people and essential to a healthy quality of life. The government and the community have the duty to defend and preserve it for present and future generations (art. 225, caput). The Constitution has adopted the conception of a broad anthropocentrism with an intragenerational perspective and, in addition, an intergenerational one in predicting the protection of environmental assets for generations to come.36 33 Criticisms of pricing of environmental assets can be found at Shiva, in: Schmidtz/Willott (eds.), Environmental Ethics: What Really Works, 2012, 217–220; Kelman, in: Schmidtz/Willott (eds.), Environmental Ethics: What Really Works, 2012, 350–357; Nussbaum, in: Schmidtz/Willot, Environmental Ethics: What Really Works, 2012, 370–387. 34 On biases to be avoided and their nefarious effects on decision-making processes, see Kahneman, Thinking, Fast and Slow, 2011. 35 Recent and interesting perspectives on economic development and profit within a reality marked by clean and sustainable energy can be verified in: Perthuis/Jouvet (eds.), Green Capital: a New Perspective on Growth, 2015. 36 Machado, Direito Ambiental Brasileiro, 2017, 116, when referring to a right to the environment, states: “Everyone has the right to an ecologically balanced environment. The right to a balanced environment belongs to everyone as humans, regardless of their nationality, race, gender, age, health status, occupation, income or place of residence. The use of the indefinite pronoun “all” extends the scope of the legal norm, since, by not particularizing who has the right to the environment, it avoids anyone excluding. The environment is a collective asset of individual and general enjoyment at the same time. The right to the environment belongs to each person but not only to individuals, being at the same time transindividual. Therefore, the right to the environment belongs to the category of diffuse interest not to a single person but instead spreading to an indeterminate collectivity. It fits the right to the environment in the problematic of new rights, mainly its characteristic of right of greater dimension.”

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It is important not to neglect, as Sarlet and Fensterseifer warn37, that the Brazilian Federal Constitution of 1988 (articles 225, 5, paragraph 2), in turn, following the influence of comparative constitutional law and even of international law, has sedimented and made positive, throughout its text, normative foundations of an ecological constitutionalism, attributing to the right to the environment the status of a fundamental right, in a formal and material sense and guided by the principle of solidarity. The obligation to repair environmental damage is extracted from the constitutional text itself. According to article 225, paragraph 2 of the Brazilian Magna Carta, those who “exploit mineral resources are obligated to redress the degraded environment according to technical solutions required by pertinent public agencies and to the law.” As per paragraph 3, conducts and activities considered harmful to the environment shall subject offenders, individuals, or legal entities, to criminal and administrative sanctions, regardless of obligations to repair damage caused. Therefore, triple criminal, administrative, and civil liability, all independent, although with reciprocal influences, remain in the environmental scope. Article 14, paragraph 1 of Brazilian Act 6938/81 established the arrangement of strict liability for redress and compensation for damage caused to the environment and to affected third parties. Strict liability is foreseen in other statutes, such as the Brazilian Biosafety Act, the Brazilian Solid Waste Act, and the New Brazilian Forest Code. In the case of nuclear damage, article 21, paragraph XXXIII, letter “d” of the Brazilian Federal Constitution expressly provides for liability irrespective of the existence of fault, as established in article 4 of Act 6453/77. The Superior Court of Justice (STJ), moreover, has recognized as applicable the theory of integral risk in matters of environmental civil liability. It is enough for the plaintiff to demonstrate the damage and the causal link and it is not necessary to demonstrate fault for the defendant to pay a compensation. Excluding from civil liability as a fortuitous event, cases of force majeure or exclusive fault of a third party does not exclude the obligation of the polluter.38 Statutes and jurisprudence of Brazilian environmental law can undoubtedly be applied within the scope of national Climate Change Law, including the reversal of the burden of proof against the defendant in the civil procedure. The Brazilian procedural system approved and later built under the aegis of the Federal Constitution of 1988 has a vast instrumental framework for jurisdictional protection of climate and human and nonhuman beings affected by global warming. The problem of the lack of a Brazilian Collective Civil Procedure Code, which is overcome in part by the jurisprudential construction in environmental matters, has been highlighted.39 These are legal remedies for defence of a stable climate, for protection of fundamental rights of human beings and for protection of non-human beings (animals and others environmental assets) affected by extreme climatic events: popular action; public civil action;40 direct action from unconstitutionality of the law or normative act; collective writ of mandamus; writ of injunction;41 direct action of constitutionality by omission; and, action of arguing for noncompliance with a fundamental constitutional precept42. All these actions can be filed to protect stable climate and living beings, as they have, in 37 Sarlet/Fensterseifer, Direito Constitucional Ambiental, Constituição, Direitos Fundamentais e Proteção do Meio Ambiente, 2014, 50. 38 Brazil, Superior Court of Justice. 2ª Sessão., REsp 1374284/MG, Rel. Min. Luis Felipe Salomão, j. 8/27/ 2014, DJe 09/05/2014. 39 Gidi, Rumo a um Código de Processo Coletivo, 2008 advocates for the necessary adoption of a Collective Code of Civil Procedure for the protection of metaindividual rights. 40 Machado, Direito Ambiental Brasileiro, 2017, 984–995. 41 Milare, Direito do Ambiente, 2018, 352–400. 42 Ferreira, in: Canotilho/Leite (eds.), Direito Constitucional Ambiental Brasileiro, 2012, 352–400.

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a way, recognized the jurisprudence of Brazilian High Courts for other subjects of Environmental Law. As climate is a vital environmental element, consequently, it can be protected by the environmental actions foreseen in our legal system.

IV. Climate litigation in Brazil: analyses of cases Climate litigation in Brazil, unlike in other countries, such as the United States43, is 43 something very recent and rare, specially due to the fact that there is not a sound doctrine regarding the Climate Change Law in the country. The jurisprudence presents few interesting cases, mainly a decision by the Supreme Federal Court, which is a cause of concern as it authorizes burning straw in the harvest of sugarcane in times of global warming and already criticized doctrinally in the academic field in original publication conducted under the Sabin Center for Climate Change Law of the Columbia Law School.44 Such decision is in conflict with the provisions of the Climate Change National Policy 44 Act (Act 12,187/2009), with the Paris Agreement, effective on 4 November 2016, and the COP 22, held in Marrakesh. Likewise, such decision is in conflict with a precedent from the STF itself, which, interpreting the Article 225 of the Federal Constitution of 1988, stated that a balanced environment is a public asset, a fundamental constitutional right and it must be protected in the interest of present and future generations.45 Three cases already judged by the STJ and the referred case decided by the STF will 45 be reviewed. The cases approach the anthropic factors causing climate change and some mention their sometimes catastrophic effects.

1. Precedent of the Supreme Federal Court It is relevant to start reviewing the decision of the STF that deemed the Act of the 46 Municipality of Paulínia, in the State of São Paulo unconstitutional, which prohibited the use of intentional fires for agricultural purposes.46 The STF is the guardian of the Constitution, and it gives has the last word in constitutional matters, as its major

43 In Brazil it is necessary to go a long way forward regarding Climate Change Law. This matter is still poorly developed, and Climate Change Law, which is of great importance, is dealt with as a small part of the Brazilian environmental law. In the United States, on the other hand, there are relevant works, with global importance, of Climate Change Law, such as Gerrard/Freeman (eds.), Global Climate Change and U.S. law, 2014; Gerrard, Threatened Island Nations: Legal Implications of Rising Seas and a Changing Climate, 2013; Gerrard, Columbia SIPA 2015; Gerrard, The Law of Clean Energy: Efficiency and Renewables, 2015; Freeman, Harvard Environmental Law Review 2017, 339–420; Posner/Weisbach, Climate Change Justice, 2010. 44 On legislation on climate change and climate litigation in Brazil, see Wedy, Climate Legislation and Litigation in Brazil, 2017, available at http://columbiaclimatelaw.com/files/2017/10/Wedy-2017-10-Climate-Legislation-and-Litigation-in-Brazil.pdf (accessed on: 1/20/2019). On the Climate Change Law and the principle of sustainable development in Brazil, see Wedy, supra (fn. 23). And finally, on the Brazilian judge’s action and the application of the principle of sustainable development, see Wedy, Sustainable Development and the Brazilian Judge, 2015, available at https://web.law.columbia.edu/sites/default/files/ microsites/climate-change/wedy_-_sustainable_development_and_brazilian_judges.pdf (accessed on: 1/ 20/2019). 45 Brazil, Supreme Federal Court. Extraordinary appeal no. 22164/SP. Justice Celso de Mello. Brazilian Justice Gazette, Brasília, DF, Nov. 17th, 1995, available at http://stf. jusbrasil.com.br/jurisprudencia/ 745049/mandado-de-seguranca-ms-22164-sp (accessed on: 5/2/2017). 46 Brazil, Supreme Federal Court. Extraordinary appeal no. 586224/SP. Justice Luiz Fux. Brazilian Justice Gazette, Brasília, DF, May 7th, 2015. 5/7/2015, available at http://redir.stf.jus.br/paginadorpub/ paginador.jsp?docTP=TP&docID=8399039 (accessed on: 1/1/2018).

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interpreter, either in its original or in its appeal competence. Its authority is provided for in Art. 102 of the Federal Constitution of 1988. In this context, the Union of the Alcohol Manufacturing Industries of the State of São Paulo (Sindicato da Indústria de Fabricação do Álcool) – SIFAESP and the Union of the Sugar Industries in the State of São Paulo (Sindicato da Indústria de Açúcar) – SIAESP have filed a claim in order to recognize the unconstitutionality of the Municipal Act no. 1,952, of December 20th, 1995, of the Municipality of Paulínia, which prohibited completely the use of intentional burning of sugarcane straw in its territory. The claim was dismissed by São Paulo State Court, because burning sugarcane straw is a primitive and rudimentary method, harmful to the environment, and that might be most conveniently replaced with mechanization. The Court understood that the Municipality could expand environmental protection through the Municipal Law, according to the Federal Act 6,766/79 and with the actual text of the Federal Constitution of 1988. The State of São Paulo presented an extraordinary appeal to the STF against the decision of the State Court, which was beneficial to the environment and climate protection. For the State of São Paulo, Resolution no. 237/97 of CONAMA did not assign administrative competence for Municipalities to deal with the matter. According to the State of São Paulo, the Municipal Act that prohibited fires in harvests was harmful to the economy of the State, making annual harvests unfeasible to rural workers. The State of São Paulo also stated that the Municipal Act, by prohibiting the burning of sugarcane straw, was beyond the limits of the interests of the Municipality of Paulinia, affecting the state economic order, the tax revenues of the State of São Paulo and causing social disturbance due to the potential dismissal of employees of the sugarcane industry and the resulting unemployment. SIFAESP and SIAESP have also filed an extraordinary appeal, on the same grounds as the Brazilian State of São Paulo, requiring the reversal of the decision. The STF has heard the appeals from the State of São Paulo, SIFAESP and SIAESP and replaced the State Court decision. According to the Justice Luiz Fux opinion: “The Municipality of Paulínia is competent to legislate on the environment, up to the limit of its local interest and given that, such regulation is harmonious with State and Federal rules (art. 24, VI c/c 30, I and II of the Brazilian Constitution). The Judicial System is inserted in the society and, therefore, it must respond to its expectations, in the sense of keeping in mind the objective of meeting the needs, as it is also a public service. In this case, it is undeniable the multidisciplinary content of the matter, involving social, economic and political issues. Such as: (i) the relevant decrease – progressive and planned – of burning of sugarcane; (ii) the impossibility to handle machines upon the existence of rugged cultivating areas; (iii) cultivation of sugarcane in smallholdings; (iv) workers with low education level; (v) and the existing pollution regardless of the chosen option. Although full mechanization in the cultivation of sugarcane is inevitable, it is necessary to reduce as much as possible its negative side. Thus, considering the weighted values, a State Law regulating the manner it understands to be suitable to meet the needs of its respective population was issued. Such diploma reflects, unquestionably, a desirable means of compatibility with the society that, together with the power directly granted by the Constitution, overly consolidates its position in the state system as a standard to be followed and respected by other units of the federation connected to the State of São Paulo. Therefore, it is not allowed an interpellation by the Supreme Federal Court, which does not recognize the interest of the Municipality in providing a balanced environment for its population. However, it is impossible to identify a local interest that provides ground to keep the Municipal 282

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Act effective, as both pieces of legislation aim at meeting the same social need, which is the maintenance of a balanced environment, specifically regarding the burning of sugarcane.”47 On the other hand, Justice Fux wrote in his opinion that the “use of machines of crops has had negative impacts on the Environment and the cane decomposition emits methane and contributes to global warming, which does not take place in the burning of the cane”. This honourable opinion unfortunately has a scientific mistake. Global warming potential (GWP) and human health indicators of sugarcane ethanol production in Brazil, in the pre-mechanization (100 % burned), current (50 % burned) and future (100 % without burning) scenarios, were calculated. In the past, the GWP of ethanol production was 1.1 kg CO2 eq L−1 and BC emissions were 32.6 kg CO2 eq L−1. The human health impact in disability adjusted life years (DALY) was 3.16E−05 DALY L−1ethanol. The current ethanol production process has a GWP 46 % smaller, while BC emissions are seven times smaller than before mechanization started. The human health impact is currently 7.72E−06 DALY L−1. In the future, with complete mechanization and the integration of first and second generation ethanol, the expected GWP emissions will be 70 % smaller, and BC emissions will be 216 times smaller than when all sugarcane was harvested with burning.48 According a specific research about this issue, the major part of the total emission (44 %) resulted from residues burning; about 20 % resulted from the use of synthetic fertilizers, and about 18 % from fossil fuel combustion.49 In the same sense, sugarcane burning cause a tremendous negative respiratory health effects.50 According to the interpretation of the Constitution by Justice Fux, which was followed by other Justices, with only a Justice Rosa Weber dissent, the Act of the State of São Paulo authorizing the fires and providing for a progressive decrease until the year 2031 shall prevail over the Municipal Act of the Municipality of Paulínia, which provided for the immediate termination of the fires in the scope of the Municipality and aimed at instant environmental protection. STF has declared the Municipal Act No. 1952 unconstitutional. The decision did not properly consider neither the severe risk of emission of greenhouse gases deriving from the fires nor the Climate Change National Policy Act, as well as it solemnly ignored International Treaties, Conventions and Agreements related to measures against emissions caused by anthropic factors, which Brazil is signatory.

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2. Precedents by the Brazilian Superior Court of Justice The STJ, headquartered in Brasília, according to the articles 104 and 105 of the 58 Brazilian Constitution, has authority to judge cases, in a special appeal, the decisions, in sole or last instance, by Regional Federal Courts or by the Courts of the States, Federal District and Territories, when the decision under appeal: a) goes against treaty or federal law, or denies its effectiveness; b) judges an act by local government valid when it is contested due to a federal law; c) construes a federal law differently from other courts.

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Brazil, Supreme Federal Court, supra (fn. 46). Galdos et al., Applied Energy 2013, p. 576. 49 See Figueiredo et al., Carbon Balance & MGMT 2010, available at https://www.ncbi.nlm.nih.gov/ pmc/articles/PMC2893520/pdf/1750-0680-5-3.pdf (accessed on: 01/20/2019). About directs and negatives impacts on local climate of sugar-cane expansion in Brazil, see Loarie/Scott et al., NATURE CLIMATE CHANGE 2011, 105. 50 About respiratory health effects caused by sugarcane burning see Ribeiro, REV. SAUDE PUBLICA 2008, available at http://www.scielo.br/pdf/rsp/v42n2/en_6804.pdf (accessed on: 01/01/2019). 48

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The STJ has adopted an externally progressive jurisprudence regarding the protection of the environment as an independent legal asset and fostering sustainable development.51 59 The Court, based on the article 27 of the old Forest Code, ruled in favour of the State Prosecutor Office of the State of São Paulo against the farmers Filipe Salles Oliveira and others in the sense that it is illegal to use the technique of burning in the harvest of sugarcane due to its negative impact on the environment and the emissions of CO2, contributing to global warming, in addition to causing respiratory damage to people, especially to farm workers.52 60 The decision, based on scientific studies, which denotes the multidisciplinarity of environmental law, stated that academic studies show that the burning of sugarcane straw causes significant environmental damage and that, considering sustainable development, there are modern instruments and technologies that are able to replace the burning practice without making the economic activity unfeasible. The Court clarified that the exception provided for in the sole paragraph of the article 27 of the Act 4,771/ 65 (old Forest Code) to the prohibition of fires must be construed restrictively when it authorizes the fires for agro-industrial or agricultural activities, as the economic interest cannot prevail over the environmental protection when there are techniques less harmful to the nature. 61 According to Justice Humberto Martins: “The interpretation of the rules that protect the environment do not comprise only, and solely, the use of strictly legal instruments, as it is a fact that the sciences related to the study of the soil, to the study of life, to the study of chemistry, to the study of physics must help the jurist in his/her daily activity of understanding the fact that it is harmful to Environmental Law. The cane field absorbs and incorporates CO2 in large amounts throughout its growing period, which lasts from 12 to 18 months on average, and the burning releases it all almost instantly, i.e., in the period of one fire, which lasts approximately from 30 to 60 minutes. Therefore, the fire releases the CO2 collected from the atmosphere during 12 to 18 months in a little longer than 30 or 60 minutes. In addition, along with the CO2, other gases are formed and released in the atmosphere.”53 Therefore, according to the opinion of the reporting Justice, the activity must be developed with modern industrial instruments and technology to reduce the environmental impact and to not use fires in cane fields for the harvest that contribute with climate change. The decision of Justices Herman Benjamin, Mauro Campbel, Eliana Calmon and Castro Meira was unanimous. 63 Braulino Basílio Maia Filho filed an ordinary proceeding against IBAMA [Instituto Brasileiro do Meio Ambiente (Brazilian Environmental Institute)], aiming at revoking a fine, from 09/20/1995, applied due to a fire in pasture carried out in an area of 600 hectares.54 64 The federal judge, a quo, ruled in favour of the plaintiff, on the grounds that the legal instrument that justified the fine (art. 14, item I, of the Act 6,938/1981) could not be 62

51 See Wedy, supra (fn. 26); Wedy, Litígios Climáticos: de acordo com o direito brasileiro, norteamericano e alemão, 2019. 52 Brazil, Superior Court of Justice. AgRg nos EDcl no REsp n. 1.094.873. Justice Humberto Martins. Brazilian Justice Gazette, Brasília, DF, Mar. 6th, 2012, available at https://ww2.stj.jus.br/processo/revista/ inteiroteor/?num_registro=201101904332&dt_publicacao=06/03/2012 (accessed on: 1/2/2018). 53 Brazil, Superior Court of Justice, supra (fn. 52). 54 Brazil, Superior Court of Justice. REsp n 1.000.731- RO. Justice Herman Benjamin. Brazilian Justice Gazette, Brasília, DF, 8 September 2009, available at https://ww2.stj.jus.br/processo/revista/inteiroteor/? num_registro=200702548118&dt_publicacao=08/09/2009 (accessed on: 01/05/2018).

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applied in this case. After an appeal by IBAMA, the Regional Federal Court of the 1st Region reversed the decision on the grounds that “the penalties for violations of the environmental legislation have express legal provision inserted in the art. 14, item I, of the Act no. 6,938/81” and that IBAMA has legal authority to enforce them. The plaintiff, dissatisfied with the decision, appealed to the STJ, which decided that it 65 is legal to apply a fine due to the burning of 600 hectares of pasture, pursuant to the provisions of the Act 6,938/1981. In his opinion, Justice Antonio Herman Benjamin, explicitly mentioned the relation 66 between the fires and climate change, indicating that: “The law provides for application of fine for “non-compliance with the measures required to the preservation or correction of inconveniences and damages caused by degradation of the environmental quality.” It is certain that the expression “noncompliance” includes acts of degradation not only by omission, but also by action. In this case, the appellant’s conduct, of carrying out the burning of an area corresponding to 600 hectares without authorization from the environmental agency, violates the law. The fires are incompatible with the purposes of environmental protection established in the Federal Constitution and in the environmental laws. In times of climate change, any exceptions to this general prohibition, in addition to being expressly provided for in federal act, must be restrictively construed by the manager and judge”.55 The STJ, on this bases, understood the fine applied by IBAMA to the plaintiff as legal, due to carrying out fires in a large amount of pastureland. The Federal Public Prosecutor’s Office of Joinville, in the State of Santa Catarina, filed a public civil action against H. Carlos Schneider S/A Com. e Ind. and S.E.R. Parafusos. The Parquet claimed that the defendants filled and drained a mangrove forest in an urban property, even after being notified by then IBDF (Brazilian Institute of Forest Development), by FATMA (Foundation of the Environment), by the municipality of the Brazilian city of Joinville and by the Port Authority. Brazilian federal judge Marcos César Romeira Moraes has ruled in favour of the plaintiff’s request. The decision was held by the Federal Regional Court of the 4th Region. The defendants lodged a special appeal to the Superior Court of Justice who rejected the defendants’ appeal and upheld the original pro environment decision. In his opinion, Justice Antonio Herman Benjamin, mentioned again the risks of climate change, especially increasing sea levels, stating that: “As a result of the evolution of scientific knowledge and changes in the ethical attitude of the human being towards Nature, several functions are recognized in mangrove forests: a) ecological, as a sea nursery, a core piece in the reproductive processes of a large number of species, a biological filter that retains nutrients, sediments and even pollutants, a buffer zone against storms and a barrier against the erosion of the coast; b) economic (source of food and traditional activities, such as artisanal fishing); and c) social (vital environment for traditional populations, whose survival depends on the exploitation of existing crustaceans, mollusks and fishes). Current Brazilian statutes reflects the scientific, ethical, political and legal transformation that repositioned the mangrove forests, taking them from a condition of health risk and undesirable condition to the level of a critically threatened ecosystem. Aiming at protecting its ecological, economic and social functions, the legislative branch assigned them a legal nature of Permanent Preservation Area. Accordingly, it is everyone’s duty, owners or not, to ensure the preservation of mangrove forests, an 55

Brazil, Superior Court of Justice, supra (fn. 54).

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ever increasing need, especially in times of climate change and increasing sea levels. Destroying them for direct economic use, with the permanent incentive of easy profit and short-term benefits, draining them or land filling them for real estate speculation or soil exploitation, or turning them into garbage dumps constitute serious harm to the ecologically balanced environment and to the welfare of the collectivity, a behaviour that must be promptly and vigorously repressed and sanctioned by the Administration and the Judiciary”.56 The decision of the STJ was unanimous in the sense of condemning the defendants: a) to remove the land fill and any buildings that are on the mangrove forest, and b) to make a specific reforestation of the mangrove forest. Justices Eliana Calmon, João Otávio de Noronha, Castro Meira and Humberto Martins also participated in this decision. 72 The precedents of the STJ, in this scenario, are in accordance to the provisions of the Paris Agreement, the Brazilian Constitution and to the National Policy of Climate Change. On the other hand, the aforementioned decision by the STF, declaring the prohibition of burning straw for sugar cane harvesting by the Act of Local Government of Paulinia unconstitutional is cause for great concern. 71

V. Conclusion Brazil has the National Climate Change Policy inserted in Act 12,187/2009, in addition to a legislative and constitutional framework, which provides adequate procedural and legal remedies for climate protection. The right to a balanced environment – whose stable climate is embedded in it – it is a third-generation or latest-dimension fundamental right according to interpretation by the STF. 74 Moreover, the cases referred to, coming from the STJ, are recognizing that climate change has having anthropogenic causes and harmful consequences. Therefore, scepticism about climate change was not accepted neither by the legislative branch nor, in the majority, for the judiciary branch. What the country needs indeed is a sound doctrine serving as a background for actions aimed at protecting living beings from extreme climatic events and also for cutting and reducing greenhouse gas emissions and especially for the adoption of adaptation and resilience measures based on the principles of precaution, prevention and sustainable development. Moreover, the principle of environmental education, provided for in the constitutional text, needs to advance and undergo qualitative sophistication, suitable for the healthy and decarbonized formation of future generations of Brazilians. 75 It would be better if, as far as Brazil is concerned, the government had already implemented the principle of climate education aimed at encouraging the production of renewable (and perhaps nuclear) energy, combating deforestation, for rationalization of agricultural activity, for the development of the means of transport by electricity, to increase clean energy driven industries, for sustainable buildings, for manufacture of appliances with low energy consumption, for the development of geoengineering and other essential actions in these times of global warming. Unfortunately, however, this is not the case. The Country still have much more to evolve. The suggested measures are very important because according to NASA 2018 was the fourth-warmest years 73

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recorded. These data means that the five warmest years in recorded history have been the last five, and that 18 of the 19 warmest years have occurred since 2001.57 Public policies carried out by the Brazilian executive branch are no longer encoura- 76 ging, as it draws up state plans and planning based on fossil fuels and does not exercise adequate supervision on the main sources of greenhouse gases emission in the country, in addition to not having efficient public anti-catastrophe plans. In this very adverse scenario, climate litigation in Brazil, which requires a guiding 77 doctrine, so that interpreters, with a sustainable vision, may draw its structuring base from the text of the Federal Constitution of 1988, from statutes, from national and international jurisprudence, from international documents and from foreign legislation. All this, however, is a necessary and future legislative production by the legislative branch in line with the modern Climate Change Law, which provides, in the other Countries, mechanisms such as cap-and-trade and taxation on carbon to discourage the use, in particular, of oil and coal as energy matrices. Climate litigation, although with little specific doctrinal basis, is a tangible reality and, 78 in the absence of implementation of the principle of environmental education, of effective public policies and modern legislation, it is important for climate protection and the right to life in a broad sense. 57 National aeronautics and space administration, 2018 fourth warmest year in continued warming trend, according to NASA, NOAA, available at https://climate.nasa.gov/news/2841/2018-fourth-warmestyear-in-continued-warming-trend-according-to-nasa-noaa/ (accessed on: 03/01/2019).

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N. Climate change litigation in Australia Bibliography: Articles/Books/Reports: Barker, Director’s Personal Liability for Corporate Inaction on Climate Change 67 Governance Directions 21 (2015); Bell-James and Forrest, Ecologically Sustainable Development and the Great Barrier Reef – a delicate balance of interests, 36 Environmental and Planning Law Journal 97 (2019); Bell-James and Ryan, Climate Change Litigation in Queensland: A Case Study in Incrementalism 33 Environmental and Planning Law Journal 515 (2016); Bell-James, Climate Change, in: Bates (ed.), Environmental Law in Australia, 10th ed., LexisNexis Butterworths 2019, 683–714; Butler, Australian Super tells Mineral Council its Climate Policy is “not strong enough”, The Guardian (2019); Climate Change Litigation Databases, Sabin Center for Climate Change Law 2019 http://climatecasechart. com/ ; Cox, NSW Considers Laws to Stop Courts and Planners Blocking Coalmines on Climate Grounds, The Guardian (2019); Independent Planning Commission NSW, Statement of Reasons for Decision: Bylong Coal Project (SSD 6367), New South Wales Government, Sydney, 18 September 2019; Keller and Grover, General Comments of the Human Rights Committee and their Legitimacy, in: Keller and Ulfstein (eds.), UN Human Rights Treaty Bodies: Law and Legitimacy, Cambridge University Press, 2012; Peel and Osofsky, A Rights Turn in Climate Change Litigation? 7(1) Transnational Environmental Law 37 (2017); Peel and Osofsky, Climate Change Litigation: Regulatory Pathways to Cleaner Energy, Cambridge University Press 2015; Pillai and Williams, Commonwealth power and environmental management: constitutional questions revisited, 32 Environmental and Planning Law Journal 395 (2015); Setzer and Byrnes, Global trends in climate change litigation: 2019 snapshot, 2019, Grantham Research Institute on Climate Change and the Environment and the Centre for Climate Change Economics and Policy 2019; Vogler et al, Queensland Labor declares its support for the resources industry as it battles to hold on to votes in the regions, The Courier Mail (2019). Cases: Armando Ferrão Carvalho and Others v. The European Parliament and the Council (2018), GC Case no. T-330/18; Ashgar Leghari v Federation of Pakistan (W.P. No. 25501/2015), Lahore High Court Green Bench, Orders of 4 September and 14 September 2015; Australian Conservation Foundation Inc v Minister for the Environment (2016) FCA 1042; Australian Conservation Foundation Inc v Minister for the Environment (2016) FCA 1042; Coast and Country Association of Queensland Inc v Smith; Coast and Country Association of Queensland Inc v Minister for Environment and Heritage Protection (2015) QSC 260; Comer v Murphy Oil, No 1:05-CV-436 (S.D Miss, 18 April 2006); Connecticut v American Electric, 406 F Supp 2d 265 (SDNY, 2005); ENvironnement JEUnesse v Attorney General of Canada (26 November 2018), Montreal 500–06 (Motion for Authorisation to Institute a Class Action and Obtain the Statute of Representative) (unofficial translation); Gloucester Resources Limited v Minister for Planning (2019) NSWLEC 7; Greenpeace Australia Ltd v Redbank Power Company Pty Ltd (1995) 86 LGERA 143; Hancock Coal Pty Ltd v Kelly (No. 4) (2014) QLC 12; Juliana v United States 18-36082 No. 6:15-cv-01517-AA (On Appeal from the United States District Court for the District of Oregon) (19 February 2019); Re Xstrata Coal Queensland Pty Ltd (2007) QLRT 33 (18); Re Xstrata Coal Queensland Pty Ltd (2007) QLRT 33; Telstra Corporation Ltd v Hornsby Shire Council (2006) NSWLEC 133; Verein KlimaSeniorinnen Schweiz et al v Federal Department of the Environment, Transport, Energy and Communications (DETEC) (2018) A2992/2017 (27 November 2018) (Federal Administrative Court of Switzerland) (unofficial translation); Wildlife Preservation Society of Queensland Proserpine/Whitsunday Branch Inc v Minister for the Environment & Heritage & Ors (2006) FCA 736; Xstrata Coal Queensland Pty Ltd v Friends of the Earth – Brisbane Co-Op Ltd (2012) QLC 13. Legislation/Treaties: Administrative Decisions (Judicial Review) Act 1977 (Cth); Charter of Human Rights and Responsibilities 2006 (Vic); Environment Protection and Biodiversity Conservation Act 1999 (Cth); Environment Protection and Biodiversity Conservation Act 1999 (Cth); Environmental Planning and Assessment Act (NSW); Environmental Planning and Assessment Amendment (Territorial Limits) Bill 2019 (NSW), introduced to Parliament on 24 October 2019; Human Rights Act 2004 (ACT); Human Rights Act 2019 (Qld). Other: AMMA Australian Resources and Energy Group, ‘Coal Drives Record 2018 Export Figures’ (Media Release, 12 February 2019) https://www.amma.org.au/news-media/media-center/coal-drives-record2018-export-figures/; Bateman et al, ‘It’s not just the climate that’s warming up: new heat on directors’, Clayton Utz (Web Page, 4 April 2019) https://www.claytonutz.com/knowledge/2019/april/its-not-just-theclimate-thats-warming-up-new-heat-on-directors; ClientEarth, ‘Climate Threatened Torres Strait Islander bring human rights claim against Australia’ (Web Page, 12 May 2019) https://www.clientearth.org/press/ climate-threatened-torres-strait-islanders-bring-human-rights-claim-against-australia/; De Wit and Mee-

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N. Climate change litigation in Australia han, ‘Further legal opinion covering directors’ duties and climate change’, Norton Rose Fullbright (Web Page, 3 April 2019) https://www.nortonrosefulbright.com/en/knowledge/publications/e35da3ac/further-legal-opinion-covering-directors-duties-and-climate-change; Dr McGrath, ‘Identifying opportunities for climate litigation in or involving Australia, Trends in Climate Litigation: Public, Private and Global – Melbourne Law School (Climate Litigation Workshop, 22 July 2019) http://envlaw.com.au/wp-content/uploads/handout_climate. pdf ; Greenhouse Gas Protocol, ‘We set the standards to measure and manage emissions,’ (Web Page, 2019) www.ghgprotocol.org/; Human Rights Committee, General comment No. 36 (2018) on article 6 of the International Covenant on Civil and Political Rights, on the right to life, UN Doc CCPR/C/GC/36, 124th session, 30 October 2018; Human Rights Committee, General comment No. 36 (2018) on article 6 of the International Covenant on Civil and Political Rights, on the right to life, UN Doc CCPR/C/GC/36, 124th session, 30 October 2018; Hutley SC and Hartford-Davis, ‘Climate Change and Directors’ Duties: Memorandum of Opinion’, Analysis & Policy Observatory, (Web Page, 7 October 2016) apo.org.au/node/ 74091; Kingham, ‘Climate Change Litigation’, speech delivered at the Environmental Defenders Office Climate Law Update, Banco Court, 18 September 2018; Korbel, ‘A new era of climate change litigation in Australia’, Corrs Chambers Westgarth, (Web Page, 8 April 2019) https://corrs.com.au/insights/a-new-eraof-climate-change-litigation-in-australia; MinterEllison, ‘Updated Hutley opinion released’, MinterEllison (Web Page, 5 April 2019) https://www.minterellison.com/articles/summary-of-updated-hutley-opinion2019 ; Philip Alston, Report of the Special Rapporteur on extreme poverty and human rights: Climate change and poverty, UN Doc. A/HRC/41/39 (29 June 2019); Task Force on Climate-related Financial Disclosures, ‘Final Report, Recommendations of the Task Force on Climate-related Financial Disclosures’, TCFD (Web Page, June 2017) https://www.fsb-tcfd.org/publications/final-recommendations-report/; The Hon A Bligh and the Hon G Wilson, ‘Govt to Legislate to Ensure Mine’s Future,’ Media Statements, (Media Release, 12 October 2007) http://statements.qld.gov.au/Statement/Id/54462; The Hon. Justice Brian J Preston, ‘Climate Change Litigation,’ Judicial Conference of Australia Colloquium (Paper Presentation, 11 October 2008) http://www.lec.justice.nsw.gov.au/Documents/preston_climate%20change%20litigation% 202008.pdf ; theGlobalEconomy.com, ‘Coal Exports – Country Rankings,’ (Web Page, 2016) https://www. theglobaleconomy.com/rankings/coal_exports/.

Contents I. Introduction ..................................................................................................... II. Climate change through the environmental impact assessment process ............................................................................................................... 1. Early cases .................................................................................................... 2. The Queensland coal mine cases ............................................................ 3. Adani before the Federal Court .............................................................. 4. New development – Rocky Hill decision.............................................. 5. Future directions and negative regulatory responses ......................... III. Emerging avenues for climate change litigation...................................... 1. Corporate law .............................................................................................. 2. Human rights law....................................................................................... 3. Operators of emissions-intensive industries......................................... IV. Conclusion........................................................................................................

1 6 8 14 33 35 41 44 45 53 59 62

I. Introduction Climate change is a politically divisive issue in Australia. As a country that is heavily 1 reliant on fossil fuel exports, it has been extraordinarily difficult for governments to take strong regulatory action on climate change, and any meaningful legislation and policies have been short-lived due to rapid changes in government over the past decade.1 Australia currently has a conservative government in power, and climate change policy is extremely weak.2

1 2

Bell-James in: Bates (ed.), Environmental Law in Australia, 2019, 683–714, 690–691. Ibid., 691.

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In Australia especially, climate change litigation has attempted to fill a significant gap left by the legislature in the climate change mitigation space. In the absence of strong climate change regulation at the federal and state levels, concerned individuals and environmental groups have taken to the courts.3 As of May 2019, there had been 94 climate change related cases brought in Australia, second only to the United States in terms of volume of litigation.4 3 There have been various attempts to categorise and define climate change litigation. Peel and Osofsky define it very broadly, using their concentric circle approach. Under this approach, litigation might have climate change as a central or peripheral issue, as one of several motivations, or might not even be framed as related to climate change, but will have implications for it.5 The Sabin Centre for Climate Change Litigation Database categorises litigation according to the cause of action used as a vehicle for climate-related arguments.6 4 Under either approach, climate change litigation in Australia can be categorised fairly easily. Most of it has had climate change as a central or peripheral issue, and most has used the environmental impact assessment (‘EIA’) process for large-scale emissions intensive projects (generally coal mines) as the framing cause of action. The first section of this Chapter will provide an outline of the key cases and themes of this litigation, and an analysis of possible future directions in this area. 5 We are at an exciting point in climate change litigation history in Australia, with interesting alternative avenues of litigation being considered across the country. The second section of this Chapter will consider these alternative possible causes of action, and their likelihood of success. These avenues include corporate law, human rights, and actions against emitters. 2

II. Climate change through the environmental impact assessment process 6

In Australia, all major projects require a number of government approvals before proceeding. For example, in Queensland a mining operation requires a mining lease under the Mineral Resources Act 1989 (Qld), which grants the company a right to the minerals under the land.7 It would also need an environmental authority under the Environmental Protection Act 1994 (Qld), and a number of other permits. Due to constitutional arrangements, most regulation occurs at the State government level,8 although an approval may also be needed under the federal Environment Protection and Biodiversity Conservation Act 1999 (Cth). 3

Cf Peel/Osofsky, Climate Change Litigation: Regulatory Pathways to Cleaner Energy, 2015. Setzer/Byrnes, Global trends in climate change litigation: 2019 snapshot, 2019. Note that this includes litigation relevant to mitigation and adaptation. This Chapter will only consider litigation regarding climate change mitigation arguments. 5 Supra (fn. 3), at 8. 6 Climate Change Litigation Databases, Sabin Center for Climate Change Law 2019, http://climatecasechart.com/. 7 In Australia, the Crown has legislatively reserved ownership of minerals below the land: see e.g. Mineral Resources Act 1989 (Cth) s 8. A company may apply for a right to mine and sell those minerals, and must then pay the Crown royalties: see Mineral Resources Act 1989 (Cth) s 311. Mining is therefore a source of revenue for Australian governments, as they receive royalties. Note that minerals are often found under private land, in which case the mining company will be required to pay the landholder compensation: see Mineral Resources Act 1989 (Cth) s 279. 8 See e.g. Pillai/Williams, Environmental and Planning Law Journal 2015, 395. 4

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Under these various Acts, the relevant government department will consider whether 7 an approval should be granted through an EIA process. These processes require the proponents to prepare information on the impacts of a project, which must then be assessed by the decision-maker. Importantly, legislation will list factors that a decisionmaker must consider in making their decision. To date, these statutes do not require governments to consider climate change specifically. For this reason, litigants have had to use other factors to argue that climate change is a relevant consideration for decisionmakers.

1. Early cases One of the earliest climate change cases in Australia was Greenpeace Australia Ltd v 8 Redbank Power Company Pty Ltd.9 A local government had granted Redbank Power Company a development approval to construct a power station, fired by coal washery tailing. Greenpeace lodged an appeal, arguing that the Court should refuse development consent for the project on the basis of its contribution to climate change, with reference to the precautionary principle.10 The Court accepted that the project would result in increased carbon dioxide emissions, and would therefore increase the greenhouse effect.11 However, the Court concluded that there was nothing in law or policy that required them to prohibit a power station development, and this was a more appropriate matter for government policy.12 The Court also acknowledged that the precautionary principle was relevant, but it did not require the increased emissions to outweigh all other relevant issues.13 Greenpeace was therefore unsuccessful. The Federal Environment Protection and Biodiversity Conservation Act 1999 (Cth) 9 has also been used as a vehicle for climate change arguments. There is no requirement in this Act for the government to consider climate change, but a person must seek approval for an action that has, will have, or is likely to have a significant impact on a World Heritage Area,14 including the Great Barrier Reef. Litigants have used this section to argue that coal mine projects which contribute to climate change, which will in turn harm the Great Barrier Reef, should therefore not be approved.15 In Wildlife Preservation Society of Queensland Proserpine/Whitsunday Branch Inc v Minister for the Environment & Heritage & Ors16 the decision-maker determined that two large coal mines did not need to be assessed and approved under the federal Act. The applicants sought judicial review,17 but were unsuccessful. Dowsett J found that the decision-maker referred to increased greenhouse gases in his reasons for the decision, and had given them due consideration.18 Therefore the decision could not be set aside. Somewhat of a breakthrough occurred in the New South Wales case of Gray v 10 Minister for Planning.19 This case concerned an application for approval for a coal mine in a part of New South Wales called Anvil Hill. The proponent prepared an environ9

(1995) 86 LGERA 143. Ibid., 145. 11 Ibid., 153. 12 Ibid. 13 Ibid., 154. 14 Environment Protection and Biodiversity Conservation Act 1999 (Cth) s 12. 15 Wildlife Preservation Society of Queensland Proserpine/Whitsunday Branch Inc v Minister for the Environment& Heritage & Ors (2006) FCA 736 at (39)-(40). 16 (2006) FCA 736. 17 Note that judicial review is a narrow form of review whereby a Court can only consider procedural aspects of the decision: see e.g. Administrative Decisions (Judicial Review) Act 1977 (Cth). 18 Supra (fn. 15), at (42)-(44). 19 (2006) NSWLEC 720. 10

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mental impact statement, which the relevant decision-maker decided was adequate. The applicant challenged this decision. Under the relevant legislation, the Minister was required to consider the ‘public interest’,20 which had been interpreted to include principles of ecologically sustainable development (‘ESD’).21 The applicant argued that the requirement to consider ESD principles including the precautionary principle and intergenerational equity in turn required the decision-maker to consider the climate change impacts of the project. 11 One of the key issues in this case – and cases thereafter – was the role of scope 3 emissions. Greenhouse Gas Emissions are generally referred to as falling within one of the following categories: – Scope 1 emissions: direct greenhouse gas emissions from a project (e.g. emissions released when a coal seam is opened); – Scope 2 emissions: indirect greenhouse gas emissions from the generation of purchased electricity; and – Scope 3 emissions: all other indirect greenhouse gas emissions resulting from a company’s activities.22 12 Many climate change cases in Australia have concerned approvals for a coal mine in circumstances where the proponent will sell the coal and not burn it themselves. This is critical, as the burning of the coal is the major source of greenhouse gas emissions. In the Gray case, Pain J was willing to find that scope 3 emissions were a relevant consideration: “I consider there is a sufficiently proximate link between the mining of a very substantial reserve of thermal coal in NSW, the only purpose of which is for use as fuel in power stations, and the emission of GHG which contribute to climate change/ global warming, which is impacting now and likely to continue to do so on the Australian and consequently NSW environment, to require assessment of that GHG contribution of the coal when burnt in an environmental assessment.”23 13

Building on from this, her Honour found that the decision-maker’s failure to consider scope 3 emissions was a failure to give consideration to ESD principles including the precautionary principle and intergenerational equity.24 However, these ended up being symbolic conclusions only, as her Honour further found these failures did not invalidate the decision as there is no standard of perfection imposed on the environmental impact statement25 – that is, they did not need to cover every possible issue. Therefore the decision was not set aside. However Pain J’s broad approach to scope 3 emissions and causation set the scene for future legal developments.

2. The Queensland coal mine cases 14

Due to Queensland’s significant untapped thermal coal resources, the state has become ‘a flash point for the conflict between coal and the climate in the courts’.26 One of the earliest climate change cases in Queensland was Re Xstrata Coal Queensland 20

Environmental Planning and Assessment Act (NSW) s 13(2) (since amended). Telstra Corporation Ltd v Hornsby Shire Council (2006) NSWLEC 133. 22 These terms are from the Greenhouse Gas Protocol, which is a widely used protocol in international accounting for greenhouse gas emissions: Greenhouse Gas Protocol, We set the standards to measure and manage emissions, (Web Page, 2019) www.ghgprotocol.org/. 23 Gray v Minister for Planning (2006) NSWLEC 720 at (100). 24 Ibid., (135). 25 Ibid., (149)-(150). 26 Bell-James/Ryan, Environmental and Planning Law Journal 2016, 515 (517). 21

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Pty Ltd & Ors (2007) QLRT 33. Queensland Conservation Council (‘QCC’) objected to Xstrata being granted a mining lease and environmental authority, and argued for conditions requiring Xstrata to offset their greenhouse gas emissions. Xstrata in turn argued that this would be economically unviable. Neither party disputed the scientific evidence regarding climate change, but the Court was asked to consider the reasonableness of the conditions imposed and the extent to which this particular mine would contribute to climate change. President Koppenol of the Land and Resource Tribunal (now the Land Court) 15 controversially went on to address the findings of some independent research his Honour had conducted – that is, material not led in evidence by the parties. In this, his Honour rejected the findings of the IPCC that temperature increases would accelerate with climate change, instead focusing on past temperature increases.27 This was a gross misunderstanding of climate science. His Honour’s ultimate conclusion was that: “In the present case, I am not satisfied that that assumption (relevantly, a demonstrated causal link between this mine’s GHG emissions and any discernable harm – let alone any “serious environmental degradation” – caused by global warming and climate change) has been shown by QCC to be valid. Indeed even if this mine’s GHG emissions were eliminated completely, QCC failed to show that that would have the slightest effect on global warming or climate change.”28 He also noted that imposing conditions on the mine ‘would have the real potential to drive wealth and jobs overseas and to cause serious adverse economic and social impacts upon the State of Queensland’.29 This decision was appealed to the Court of Appeal, and sensibly overturned on the basis of a breach of natural justice.30 The Court of Appeal ordered that it be remitted for rehearing. However, Queensland’s legislature quickly acted, and several hours after the Court of Appeal decision the Queensland Premier issued a press release resolving to pass legislation permitting the mine to continue. The release stated that ‘the coal industry is central to the Queensland economy and we will not allow a technicality to threaten its development and jobs’.31 The next climate change case heard by Queensland’s Land Court was Xstrata Coal Queensland Pty Ltd & Ors v Friends of the Earth – Brisbane Co-Op Ltd & Ors, and Department of Environment and Resource Management (‘Wandoan mine case’).32 Fortunately by this point, climate science was no longer a controversial issue before the Court. However, two lingering issues from the earlier Xstrata case remained – the relevance of scope 3 emissions, and the need to balance environmental impacts against economic ones. In the Wandoan Mine case the Land Court heard objections to the proposed Wandoan Coal Mine, an open-cut mine in the Surat Basin, which would produce export coal at a rate of 30 million tonnes per annum for 30‐35 years.33 The target export markets were identified as Asia and South America.34 27

Re Xstrata Coal Queensland Pty Ltd (2007) QLRT 33 (18). Ibid., (21). 29 Ibid., (24). 30 Queensland Conservation Council v Xstrata Coal Queensland Pty Ltd (2007) QCA 338 at (47). 31 Bligh/Wilson, Govt to Legislate to Ensure Mine’s Future, Media Statements, (Media Release, 12 October 2007) http://statements.qld.gov.au/Statement/Id/54462. 32 Xstrata Coal Queensland Pty Ltd v Friends of the Earth – Brisbane Co-Op Ltd (2012) QLC 13. 33 Ibid., (2) and (4)–(6). 34 Ibid., (497). 28

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A key issue for the Court was the relevance of scope 3 emissions. Whilst Pain J of the New South Wales Land and Environment Court was willing to interpret legislation very broadly in Gray, MacDonald P in this case interpreted the relevant legislation very narrowly. Her Honour found that climate change is not a relevant consideration under the Mineral Resources Act due to the wording of the Act, which focuses purely on the physical acts of removing minerals from the earth,35 and under the Environmental Protection Act, which applies narrowly to ‘mining activities’.36 Her Honour also stated that the objectors were unable to prove any specific environmental impact that would be caused by the proposed operations.37 Causation has been a notoriously difficult issue in Australian climate change litigation, due to the impossibility of linking a single project with a discernable impact on climate change. 21 This case also saw the emergence of the ‘market substitution argument’ before the Queensland Courts. The market substitution assumption is the assertion that if coal is not mined by the specific company under scrutiny, it will simply be mined elsewhere, by someone else. The assumption is used to support the conclusion that a proposed mine has no net environmental impact. The market substitution assumption has been one of the major barriers to success in climate change litigation in Australia.38 22 Xstrata argued that: 20

“stopping the project will not affect the amount of GHGs in the atmosphere. If the project is stopped, the coal that it would have produced will be replaced by coal produced elsewhere which will produce the same or a higher amount of GHG emissions when burned.”39 This was accepted by the Court, which noted that ‘stopping the project will have no impact on climate change because it will have no impact on the global demand for coal and therefore no impact on global greenhouse gas emissions’.40 24 The next key case in Queensland was Hancock Coal Pty Ltd v Kelly & Ors and Department of Environment and Heritage Protection (No. 4).41 This case concerned a proposed mine in the Galilee Basin, with a lifespan of 30 years.42 At its peak, the mine would produce 30mtpa of coal,43 with the intended market for the coal being overseas, primarily in Asia.44 25 The outcome of this case was no different to that in the Wandoan case,45 but it did result in some broadening of the Court’s approach to scope 3 emissions. Under s 269(4) (k) of the Mineral Resources Act, the Court must consider ‘public interest’, and Member Smith interpreted this as including a consideration of scope 3 emissions.46 This interpretation opened the door to further consideration of scope 3 emissions in later cases. 26 However, Member Smith also accepted the market substitution argument, and an expert report that indicated that ‘the amount of coal combusted in the world… will be 23

35

Supra (fn. 26), 525–526; See Mineral Resources Act (1989) ss 6A and 234. Ibid., 596–597. 37 Ibid., 549. 38 Bell-James/Collins, Environmental and Planning Law Journal, 2020 (In Press). 39 Supra (fn. 32), (515). 40 Ibid., (559). 41 Hancock Coal Pty Ltd v Kelly (No. 4) (2014) QLC 12. 42 Ibid., (22). 43 Ibid., (22). 44 Ibid., (24). 45 Ibid., (216). 46 Ibid., (218). 36

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determined by demand rather than restrictions on supply, at least under current global policy settings’ (emphasis added).47 His ultimate conclusion was that: 27 “I can sympathise with the position of the objectors who see greenhouse gas emissions rising, and the likely adverse climate change consequences that will flow on should nothing be done to alter the course that the world is heading down… However, I must on the evidence of this case determine that it is the demand for coal-fired electricity, and not the supply of coal from coal mines, which is at the heart of the problem.”48 This decision was upheld by higher courts.49 The most recent word on climate change from Queensland’s Land Court was in 28 Adani Mining Pty Ltd v Land Services of Coast and Country Inc & Ors,50 in relation to the highly controversial Carmichael mine. At the time of the objections hearing, this mine had a proposed production rate of 60mtpa and an operating life of 60 years.51 The main target export market is India. President MacDonald relied heavily on the market substitution assumption, and 29 stated that: “The conclusion in CCAQ v Smith also in my opinion disposes of the remaining submissions by the first respondent set out above. If in fact global emissions are not increased, then there is no impact that constitutes or causes environmental harm (emphasis added). It begs the question to assert, as the first respondent has done that the activity is unlawful without first determining whether there has been environmental harm caused by an increase in global emissions.”52 She ultimately reached the same conclusion as in the Wandoan Mine case, but with 30 heavier reliance on the market substitution assumption. Bell-James and Ryan noted that: “This approach has shifted the analysis of environmental impacts from the absolute impacts of the proposed project, to a question of whether the impacts are worse than its market substitute. If the impacts are no worse than the substitute, then a Court may infer that the project will have no impact. This inference remains at odds with the science that all emissions cumulatively contribute to the impacts of climate change and will continue to be a source of debate.”53 In an analysis of these Queensland cases, Bell-James and Ryan argue that significant 31 progress has been made before the Courts, despite the fact that there has not yet been a successful outcome. For example: 1. Climate science is accepted by the Land Court; 2. Scope 3 emissions are legally relevant for the decision-maker to consider; 3. Cause and effect between a project’s scope 3 emissions and climate change exists; 4. Single projects are significant; 5. Emissions are assessed on a cumulative basis; and 6. Cost rules, environmental impacts and economic evidence have been clarified.54 47

Ibid., (224) (emphasis added). Ibid., (231). 49 Coast and Country Association of Queensland Inc v Smith; Coast and Country Association of Queensland Inc v Minister for Environment and Heritage Protection (2015) QSC 260. 50 Adani Mining Pty Ltd v Land Services of Coast and Country Inc (2015) QLC 48. 51 Ibid., (2). 52 Ibid., (453). 53 Supra (fn. 26), 530. 54 Ibid., 531–534. 48

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The key barrier to success is the market substitution assumption, but there are suggestions that this can be overcome. For example, Member Smith concluded that the market substitution assumption was valid ‘at least under current global policy settings’ (emphasis added).55 In a 2018 extra-curial address President Kingham, the current President of Queensland’s Land Court, questioned whether the situation would change if policy settings changed.56 She noted that a lot had changed since the Carmichael hearing, including the Paris Agreement, improvements in the reliability and costeffectiveness of renewable energy, and an increase in the price of coal.57 This has potentially paved the way for strong arguments that the market substitution argument is no longer a critical consideration.58

3. Adani before the Federal Court The proposed Adani coal mine in Queensland’s Galilee basin has been a significant source of controversy in Australia. In addition to the Land Court hearing discussed above, approvals for the mine have also been challenged at the federal level. The case of Australian Conservation Foundation Inc v Minister for the Environment59 concerned the federal government approval under the Environment Protection and Biodiversity Conservation Act 1999 (Cth). The Australian Conservation Foundation challenged this decision, alleging, amongst other things, that the Minister failed to consider the combustion impacts from the burning of coal on climate change, and subsequently on the Great Barrier Reef.60 As mentioned above at mn I, an argument of this type under the federal law is quite complex. Bell-James and Forrest note that there are essentially six factors upon which a Court would need to be satisfied before accepting an argument of this kind. These factors are: 1. Coal is extracted from a mine by the proponent; 2. Coal is sold by the proponent to a third party; 3. That third party burns coal; 4. This burning of coal produces emissions (scope 3 emissions); 5. These emissions increase global temperature/exacerbate climate change; and 6. This climate change causes impacts on a prescribed matter of national environmental significance, which in this case, would be the GBRWHA or GBRMP.61 34 Impact is defined very broadly under the Environment Protection and Biodiversity Conservation to include impacts caused by a third party where the action under consideration essentially facilities that impact.62 Therefore the first four parts of the argument are theoretically easy to make. However, the final two provide some difficulty.63 In the statement of reasons for the decision to approve Adani’s mine, the Minister concluded that: 33

“It is therefore not possible to draw robust conclusions on the likely contribution of the project to a specific increase in global temperature. As a result it is difficult to identify the necessary relationship between the taking of the action and any possible impacts 55

Supra (fn. 41), at (224) (emphasis added). Kingham, Climate Change Litigation, speech delivered at the Environmental Defenders Office Climate Law Update, Banco Court, 18 September 2018, at 10. 57 Ibid., 10. 58 Supra (fn. 38). 59 (2016) FCA 1042. 60 Australian Conservation Foundation Inc v Minister for the Environment (2016) FCA 1042 at (67). 61 Bell-James/Forrest, Environmental and Planning Law Journal, 2019, 97. 62 Environment Protection and Biodiversity Conservation Act 1999 (Cth) s 527E. 63 Supra (fn. 51). 56

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on relevant matters of national environmental significance which may occur as a result of an increase in global temperature [emphasis added].”64 The Federal Court agreed, and found that the Minister had fulfilled the relevant obligations under the EPBC Act.65 This decision was upheld on appeal.66

4. New development – Rocky Hill decision With climate change litigation having been largely unsuccessful in Australia up until 2019, the landmark ‘Rocky Hill’ decision was a cause for celebration amongst environmental groups. In 2019, Chief Justice Preston of the NSW Land and Environment Court handed down his Honour’s judgment in Gloucester Resources Limited v Minister for Planning (‘Rocky Hill’ case).67 This case concerned an application for a proposed coking coal mine. The New South Wales Independent Planning Commission (‘IPC’) had rejected the mine on a number of grounds including climate change. The proponent of the proposed mine challenged this decision before the New South Wales Land and Environment Court. Preston CJ’s decision is vastly different to the decisions of Queensland’s Land Court as his Honour was willing to overcome the hurdles that have confounded Queensland judges: the relevance of scope 3 emissions, and the market substitution assumption. His Honour found that scope 3 emissions are relevant considerations,68 drawing on national and international jurisprudence. His Honour also found a causal link between emissions (including scope 3 emissions) and climate change.69 One of the arguments raised by the proponent before the Court was the market substitution assumption, with the proponent arguing that ‘if demand is not met from Australian coal mines, investment will flow to other large coal producers and mines will be developed in countries such as India and Indonesia’.70 In a very significant move in the Australian context, Preston CJ rejected the market substitution argument on the basis that it is ‘flawed’.71 His Honour noted that there is no certainty that an alternative mine will be developed elsewhere, and referred to evidence that other countries are in fact taking action to reduce their emissions.72 His conclusion on the market substitution assumption was as follows: “There is also a logical flaw in the market substitution assumption. If a development will cause an environmental impact that is found to be unacceptable, the environmental impact does not become acceptable because a hypothetical and uncertain alternative development might also cause the same unacceptable environmental impact. The environmental impact remains unacceptable regardless of where it is caused. The potential for a hypothetical but uncertain alternative development to cause the same unacceptable environmental impact is not a reason to approve a definite development that will certainly cause the unacceptable environmental impacts. In this case, the potential that if the Project were not to be approved and therefore not cause the unacceptable GHG emissions and climate change impacts, 64

Cited in Australian Conservation Foundation Inc v Minister for the Environment (2016) FCA 1042 at

(58). 65

Ibid., (160). Ibid., (58). 67 Gloucester Resources Limited v Minister for Planning (2019) NSWLEC 7. 68 Ibid., (487). 69 Ibid., (525). 70 Ibid., (534). 71 Ibid., (538). 72 Ibid., (538). 66

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some other coal mine would do so, is not a reason for approving the Project and its unacceptable GHG emissions and climate change impacts.”73 39

His Honour concluded the case with the following statement: “an open cut coal mine in this part of the Gloucester valley would be in the wrong place at the wrong time. Wrong place because an open cut coal mine in this scenic and cultural landscape, proximate to many people’s homes and farms, will cause significant planning, amenity, visual and social impacts. Wrong time because the GHG emissions of the coal mine and its coal product will increase global total concentrations of GHGs at a time when what is now urgently needed, in order to meet generally agreed climate targets, is a rapid and deep decrease in GHG emissions. These dire consequences should be avoided. The Project should be refused.”74

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This so-called ‘wrong place, wrong time’ test has already generated significant discussion within Australia legal circles. Although the decision does not bind Courts in other Australian States, no doubt litigators in these other states will be considering how this test can be used as a basis for similar arguments before their home Courts.

5. Future directions and negative regulatory responses Through early to mid-2019, it seemed as though the Rocky Hill decision might be a turning point in Australian climate change law. The New South Wales’ Independent Planning Commission (‘IPC’) subsequently referred to the Rocky Hill judgment in its decision to reject an application for a thermal coal mine (the Bylong Coal Project) on grounds including climate change (by virtue of the requirement to consider ‘public interest’). The IPC also noted that the NSW government has endorsed the Paris Agreement, and affirmed the statements of Preston CJ that ‘exploitation and burning of a new fossil fuel reserve, which will increase GHG emissions, cannot assist in achieving the rapid and deep reductions in GHG emissions that are necessary’ to meet the Paris obligations.75 The IPC further concluded that ‘NSW is currently in a transition away from the use of fossil fuels as an energy source. In that context, the Commission is of the view that the cumulative environmental impact of the Project… needs to be considered when weighing the acceptability of GHG emissions associated with the mine’.76 42 The unfortunate side effect that sometimes results from climate change litigation is swift and negative regulatory action, as evidenced in Queensland in response to the 2007/2008 Xstrata decisions. This is also occurring in New South Wales, with the State Government introducing a Bill to restrict planning authorities from considering the impacts of scope 3 emissions.77 The Bill followed a campaign from the New South Wales Minerals Council.78 The proposed legislation prohibits the imposition of conditions on a development consent that relate to impacts occurring outside of Australia.79 This is significant because a majority of coal mined in Australia is exported and burned 41

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Ibid., (545). Ibid., (699). 75 Independent Planning Commission NSW, Statement of Reasons for Decision: Bylong Coal Project (SSD 6367), New South Wales Government, Sydney, 18 September 2019, at (691) citing Gloucester Resources, supra (fn. 67), at (525). 76 Ibid., (692). 77 Environmental Planning and Assessment Amendment (Territorial Limits) Bill 2019 (NSW), introduced to Parliament on 24 October 2019. 78 Cox, The Guardian, 2019. 79 Environmental Planning and Assessment Amendment (Territorial Limits) Bill 2019 (NSW) Schedule 1. 74

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overseas. If this legislation is passed, it will effectively sterilise the impacts of the Rocky Hill judgment. This will be an interesting future area to watch. Future Queensland litigation will also be of interest. In the wake of the 2019 federal 43 election, in which a conservative government triumphed, the Queensland government has rushed to signal its support for coal mines.80 To this end, there is unlikely to be any regulatory action on coal and climate change in the near future, and there are likely to be more applications for coal mine approvals. This will set the stage for more legal challenges to coal mine approvals. The potential future application of the market substitution assumption is also a critical future area to watch.

III. Emerging avenues for climate change litigation The majority of climate change litigation in Australia has, to date, concerned the 44 environmental impact assessment process. Whilst section 2.5 concluded that there is still significant opportunity for further developments in this space, there are also several other potentially promising arenas for future climate change litigation in Australia. These key areas will be discussed in this section.

1. Corporate law The role of corporate law in climate change litigation is emerging as a hot topic of 45 discussion amongst lawyers in Australia.81 One potential avenue for future litigation is in relation to company directors’ duties. The Corporations Act 2001 (Cth) s 180(1) provides that a company director or officer is under an obligation to exercise their powers and discharge their duties with the degree of care and diligence that a reasonable person would exercise if they: a) Were a director or officer of a corporation in the corporations’ circumstances; and b) Occupied the office held by, and had the same responsibilities within the corporation as, the director or officer. This incorporates both objective and subjective elements, so a duty of care cannot be 46 generalised.82 However, the duty of due care and diligence generally requires a process of information gathering and deliberation, within the context of a particular business.83 In 2016, an Australian law firm engaged Noel Hutley SC, one of Australia’s leading 47 barristers, to provide an advice considering the extent to which the duty under s 180(1) permitted or required directors to respond to climate change risks. In the landmark ‘Hutley opinion’, Hutley and Hartford-Davis indicated that directors of all companies should at least consider the effect of climate change risk on their business.84 In 2019 Hutley and Hartford-Davis were engaged to provide an updated advice, in which they noted that, since 2016, there has been a ‘profound and accelerating shift in the way that 80

Vogler et al., The Courier Mail, 2019. See e.g. Bateman et al., It’s not just the climate that’s warming up: new heat on directors, Clayton Utz (Web Page, 4 April 2019) https://www.claytonutz.com/knowledge/2019/april/its-not-just-the-climatethats-warming-up-new-heat-on-directors; MinterEllison, Updated Hutley opinion released, MinterEllison (Web Page, 5 April 2019) https://www.minterellison.com/articles/summary-of-updated-hutley-opinion2019; De Wit/Meehan, Further legal opinion covering directors’ duties and climate change, Norton Rose Fullbright (Web Page, 3 April 2019) https://www.nortonrosefulbright.com/en/knowledge/publications/ e35da3ac/further-legal-opinion-covering-directors-duties-and-climate-change. 82 Hutley/Hartford-Davis, Climate Change and Directors’ Duties: Memorandum of Opinion, Analysis & Policy Observatory, (Web Page, 7 October 2016) apo.org.au/node/74091 (the ‘Hutley opinion’). 83 Barker, Governance Directions 2015, 21 (22). 84 Supra (fn. 82), (35). 81

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Australian regulators, firms and the public perceive climate risk (…) these matters elevate the standard of care that will be expected of a reasonable director’.85 48 The standard of care would include a requirement for company directors to actively turn their minds to climate change impacts and consider the potential ramifications for their business.86 It seems clear that fulfilling this duty will also involve some degree of disclosure. The international Task Force on Climate-related Financial Disclosures (‘TCFD’) was established to develop ‘voluntary, consistent climate related financial disclosures that would be useful to investors, lenders, and insurance underwriters in understanding material risks’.87 Its 2017 Final Report contained a recommendation that companies: – Disclose the organisation’s governance around climate-related risks and opportunities; – Disclose the actual and potential impacts of climate-related risks and opportunities on the organisation’s businesses, strategy and financial planning where such information is material; – Disclose how the organisation identifies, assesses, and manages climate-related risks; and – Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material.88 49 These recommendations have been endorsed in Australia by the Australian Prudential Regulation Authority, the Reserve Bank of Australia, and the Australian Securities and Investments Commission.89 50 In their 2019 supplementary opinion, Hutley and Hartford-David concluded that: “it is apparent that regulators and investors now expect much more from companies than cursory acknowledgement and disclosure of climate change risks. In those sectors where climate risks are most evident, there is an expectation of rigorous financial analysis, targeted governance, comprehensive disclosures and, ultimately, sophisticated corporate responses at the individual firm and system level. The effect of regulatory and investor intervention is that large scale firms will be expected to invest seriously in capabilities to monitor, manage and respond to climate change risks… In turn, that means that the exposure of individual directors to “climate change litigation” is increasing, probably exponentially, with time.”90 51

Although there has not yet been a test case in Australia, exposure to litigation risk is rapidly increasing.91 In 2017, a group of shareholders brought an action against the Commonwealth Bank of Australia for failure to adequately disclose the risks of climate change. The claim was later withdrawn when CBA committed to undertaking climate change scenario analysis in its next annual report.92 In October 2019, Australia’s largest superannuation fund, AustralianSuper, warned a number of industry groups including

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Ibid., (4). Supra (fn. 81), (Bateman et al.). 87 Task Force on Climate-related Financial Disclosures, Final Report, Recommendations of the Task Force on Climate-related Financial Disclosures, TCFD (Web Page, June 2017) https://www.fsb-tcfd.org/ publications/final-recommendations-report/ at iii. 88 Ibid., 14. 89 Supra (fn. 82), (7.1). 90 Ibid., (21)–(22). 91 Ibid. 92 Korbel, A new era of climate change litigation in Australia, Corrs Chambers Westgarth, (Web Page, 8 April 2019) https://corrs.com.au/insights/a-new-era-of-climate-change-litigation-in-australia. 86

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the Minerals Council that ‘its position on the climate crisis was not good enough and the peak mining body needed to do more’.93 Given the increasing interest around corporate law and climate change, it is likely 52 that these developments are a sign of significant advances to come in future years.

2. Human rights law The regime for the protection of human rights in Australia is less developed than in many other countries. The Commonwealth Constitution provides some limited protections for human rights, but there is no comprehensive bill of rights. Some states have acted to fill this gap, including the Australian Capital Territory,94 Victoria95 and Queensland.96 The Australian Capital Territory Act and Victorian Charter were introduced in 2004 and 2006 respectively, but have not yet been used for climate change arguments. The Queensland legislation was passed in 2019 and commenced in 2020, and has been recognised as a potentially significant source of climate change claims due to the major coal projects pending and likely to be proposed in the future.97 The observed link between climate change and impacts on human rights is also becoming clearer, with a recent report by the UN Special Rapporteur on Extreme Poverty and Human Rights noting that ‘climate change threatens truly catastrophic consequences across much of the globe and the human rights of vast numbers of people will be among the casualties’.98 The Queensland Act enshrines a number of rights derived from the International Covenant on Civil and Political Rights, the Universal Declaration of Human Rights, and the International Covenant on Economic, Social and Cultural Rights, including the following which are especially relevant to climate change: – The right to life; – Property rights; – Cultural rights – generally; and – Cultural rights – Aboriginal peoples and Torres Strait Islander peoples. Crucially, the Queensland Act states that ‘international law and the judgments of domestic, foreign and international courts and tribunals relevant to a human right may be considered in interpreting a statutory provision’.99 The international context is therefore highly relevant, and there has been significant progress towards linking human rights and climate change at the international level. Much of this progress has occurred in relation to the right to life. For example, the Human Rights Committee’s100 General Comment101 on the Human Right to Life released in October 2018102 stated that ‘environmental degradation, climate change and unsustainable development constitute some of the most pressing and serious threats 93

Butler, The Guardian, 2019. Human Rights Act 2004 (ACT). 95 Charter of Human Rights and Responsibilities 2006 (Vic). 96 Human Rights Act 2019 (Qld). 97 Supra (fn. 38). 98 Philip Alston, Report of the Special Rapporteur on extreme poverty and human rights: Climate change and poverty, UN Doc. A/HRC/41/39 (29 June 2019) (1). 99 Human Rights Act 2019 (Qld) s 48(3). 100 The Human Rights Committee is established pursuant to art 28(1) of the ICCPR. 101 The Human Rights Committee shall make such general comments as it may consider appropriate, and transmit these to State parties: ICCPR art 40(4). General Comments are not legally binding, but are considered as important and expert pronouncements on Covenant issues: Keller/Grover in: Keller/ Ulfstein (eds.), UN Human Rights Treaty Bodies: Law and Legitimacy, 2012, pp 116–198, at 129. 102 Human Rights Committee, General comment No. 36 (2018) on article 6 of the International Covenant on Civil and Political Rights, on the right to life, UN Doc CCPR/C/GC/36, 124th session, 30 October 2018. 94

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to the ability of present and future generations to enjoy the right to life’.103 To this end, ‘implementation of the obligation to respect and ensure the right to life, and in particular life with dignity, depends, inter alia, on measures taken by State parties to preserve the environment and protect it against harm, pollution and climate change caused by public and private actors’.104 57 There has also been significant progress before international courts in the human rights space, with Peel and Osofsky observing that, internationally, climate change litigation has taken a ‘rights turn’, with a trend of human rights cases being brought before courts, accompanied by increasing judicial receptivity to these arguments.105 In the 2015 Ashgar Leghari case, Pakistan’s Lahore High Court found that a failure to implement existing climate change policy was a breach of the applicant’s human rights, including the right to life.106 A number of other cases are on foot in jurisdictions across the globe,107 as well a complaint lodged with the UN Human Rights Committee in May 2019 by a group of Torres Strait Islanders against the Australian government. This claim alleged that the government’s failure to take action on climate change has contravened, amongst other rights, the human right to life.108 58 Although highly speculative at this stage, it seems that the conditions are all present for a human rights and climate change case to be run in Queensland. This will be another area to watch with significant interest.

3. Operators of emissions-intensive industries To date, there have not been cases in Australia against the operators of large-scale emissions-intensive industries such as power stations. Cases of this type in the United States have been run using causes of action including nuisance109 and negligence.110 Preston CJ, writing extra-curially, has considered the potential for this type of action in Australia. His Honour concluded that there would likely be some legal challenges to overcome, but the door is not necessarily closed to this type of action.111 60 Chris McGrath, a Queensland lawyer, has considered opportunities for bringing actions against Australian emitters in foreign domestic Courts. He argues that ‘result offences give inter-jurisdictional liability at common law and under statute for an act done outside the territory of a state that has a result inside the territory of a state, 59

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Ibid., (62) (Emphasis added). Ibid., (Emphasis added). 105 Peel/Osofsky, Transnational Environmental Law, 2017, 37 (40). 106 Ashgar Leghari v Federation of Pakistan (W.P. No. 25501/2015), Lahore High Court Green Bench, Orders of 4 and 14 September 2015. 107 ENvironnement JEUnesse v Attorney General of Canada (26 November 2018), Montreal 500–06 (Motion for Authorisation to Institute a Class Action and Obtain the Statute of Representative) (unofficial translation); Armando Ferrão Carvalho and Others v. The European Parliament and the Council (2018), GC Case no. T-330/18; Verein KlimaSeniorinnen Schweiz et al v Federal Department of the Environment, Transport, Energy and Communications (DETEC) (2018) A-2992/2017 (27 November 2018) (Federal Administrative Court of Switzerland) (unofficial translation); Juliana v United States 1836082 No. 6:15-cv-01517-AA (On Appeal from the United States District Court for the District of Oregon) (19 February 2019). 108 ClientEarth, Climate Threatened Torres Strait Islander bring human rights claim against Australia (Web Page, 12 May 2019) https://www.clientearth.org/press/climate-threatened-torres-strait-islandersbring-human-rights-claim-against-australia/. 109 See e.g. Connecticut v American Electric, 406 F Supp 2d 265 (SDNY, 2005). 110 See e.g. Comer v Murphy Oil, No 1:05-CV-436 (S.D Miss, 18 April 2006). 111 Preston, Climate Change Litigation, Judicial Conference of Australia Colloquium (Paper Presentation, 11 October 2008) http://www.lec.justice.nsw.gov.au/Documents/preston_climate%20change%20litigation%202008.pdf pp 6–7. 104

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including for pollution of waters or the atmosphere’.112 He then analyses the potential for a group of customary landholders in Papua New Guinea (‘PNG’) to bring proceedings against Australia’s largest emitter in PNG, using their domestic constitution.113 This may be another area to watch with interest. Although these types of claims are currently highly speculative, it is possible that 61 claims against emitters will arise in Australia. This is especially the case if legislatures continue to take regulatory action to negate the effect of actions against government. If litigation against government becomes an unviable way to advance climate change arguments, it seems foreseeable that litigants will search for an alternative.

IV. Conclusion Despite being the country with the second-highest number of climate change cases worldwide, in some respects climate change litigation in Australia is still in its early stages, with numerous fruitful causes of action and avenues still available for consideration. Even though the majority of cases to date have arisen in the environmental impact assessment context, there is still the potential for further progress to be made, including through dismantling the pervasive market substitution assumption. However, this potential must be counterbalanced against the likelihood of negative regulatory responses following a successful case. The other potential outcome of negative regulatory responses is that they may shift litigants to bring actions against private entities instead. This Chapter has briefly considered the potential for litigation against corporations and large-scale emitters, and concluded that these are crucial areas for future action in this space. Finally, this Chapter also considered the potential for human rights legislation to be used as a vehicle for climate change arguments, and concluded that this is highly possible with the recent passage of human rights legislation in a jurisdiction that contributes significantly to the coal export market.114 Therefore although there has already been a large number of cases in Australia, there continues to be ample scope for future arguments to be run. The future of climate change litigation in Australia will be dynamic and exciting to observe over the coming years. 112 McGrath, Identifying opportunities for climate litigation in or involving Australia, Trends in Climate Litigation: Public, Private and Global – Melbourne Law School (Climate Litigation Workshop, 22 July 2019) http://envlaw.com.au/wp-content/uploads/handout_climate.pdf. 113 Ibid. 114 Australia is one of the world’s largest coal exporters, and Queensland is a major contributor to the export market: see e.g. theGlobalEconomy.com, Coal Exports – Country Rankings, (Web Page, 2016) https://www.theglobaleconomy.com/rankings/coal_exports/, AMMA Australian Resources and Energy Group, Coal Drives Record 2018 Export Figures (Media Release, 12 February 2019) https://www.amma. org.au/news-media/media-center/coal-drives-record-2018-export-figures/, where it was noted that ‘more than half of the nation’s $66 billion in Australian coal export revenue recoded in 2018 came from Queensland’s $35.7 billion worth of exports’.

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O. Climate change litigation in the United Kingdom Bibliography: Case law: Ashgar Leghari v Federation of Pakistan (W.P. No 25501/2015) Lahore High Court Green Bench; Baroness Jenny Jones v Commissioner for Metropolitan Police [2019] EWHC 2957 (Admin); Bradford v. West Devon BC [2007] PAD 45; Breyer Group Plc and Others v Secretary of State for Energy and Climate Change [2014] EWHC 2257; City of Bradford Metropolitan Council v. 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O. Climate change litigation in the United Kingdom in Farrall/Ahmed/French (eds.), Criminological and Legal Consequences of Climate Change, Hart, 2012, 47–62; Hilson, Environmental SLAPPs in the UK: Threat or Opportunity?, Environmental Politics, Vol. 25, No. 2, March 3, 2016, 248–267; Holder/Lee, Environmental Protection, Law, and Policy: Text and Materials, 2nd ed., Law in Context, Cambridge University Press 2007; Jackson/Gilmore/Monk, Policing Unacceptable Protest in England and Wales: A Case Study of the Policing of Anti-Fracking Protests, Critical Social Policy, Vol. 39, No. 1, 2019, 23–43; Jones, Wind Energy and Adverse Visual-Impact Litigation: A Balance of Global and Local Interests?, Climate Law, Vol. 6, No. 3–4, October 11, 2016, 336–352; Kaminskaite-Salters, Climate Change Litigation in the UK: Its Feasibility and Prospects, in Faure/Peeters (eds.), Climate Change Liability, Edward Elgar 2011, 165–188; Laville, Fight against Heathrow Expansion on Verge of Victory, Says McDonnell, The Guardian, October 17, 2019, sec. Environment. https://www.theguardian.com/environment/2019/oct/17/heathrow-expansion-proteston-verge-of-victory-says-shadow-chancellor; Long/Hamilton, The Climate Necessity Defense: Proof and Judicial Error in Climate Protest Cases, Stanford Environmental Law Journal, Vol. 38, No. 57, 2018, 57–115; MacKay/Stone, Potential Greenhouse Gas Emissions Associated with Shale Gas Extraction and Use, Department of Energy and Climate Change, September 9, 2013. https://assets.publishing. service.gov.uk/government/uploads/system/uploads/attachment_data/file/237330/MacKay_Stone_shale_study_report_09092013.pdf; Muinzer, ‘To PV or Not to PV’: An Analysis of the High Court’s Recent Treatment of Solar Energy”, Environmental Law Review, Vol. 17, No. 2, June 2015, 128–135; Osofsky/Peel, Litigation’s Regulatory Pathways and the Administrative State: Lessons from the U.S. and Australian Climate Change Governance, Georgetown International Environmental Law Review, Vol. 25, 2013, 207–259; Peel/Osofsky, A Rights Turn in Climate Change Litigation?, Transnational Environmental Law, Vol. 7, No. 1, 2018, 37–67; Pekic, Spain Publishes Retroactive PV FIT Cut, PV Magazine, February 21, 2013. https://www.pv-magazine.com/2013/02/21/spain-publishes-retroactivepv-fit-cuts_100010298/; Scotford/Bowman, Brexit and Environmental Law: Challenges and Opportunities, King’s Law Journal, Vol. 27, 2016, 416–419; Sea-Threatened Villagers Call for Answers, BBC News, October 10, 2019, sec. Wales. https://www.bbc.com/news/uk-wales-49994297; Setzer/Byrnes, Global trends in climate change litigation: 2019 snapshot; http://www.lse.ac.uk/GranthamInstitute/wpcontent/uploads/2019/07/GRI_Global-trends-in-climate-change-litigation-2019-snapshot-2.pdf; Stefanini, ‘End of the Road’ for UK Citizens’ Climate Case Rejected by Appeal Court, Climate Home News, January 30, 2019. https://www.climatechangenews.com/2019/01/30/end-road-uk-citizens-climate-case-rejected-appeal-court/; Taylor, ‘Enough Is Enough’: Biggest-Ever Climate Protest Sweeps UK”, Guardian, September 20, 2019. https://www.theguardian.com/environment/2019/sep/20/enoughbiggest-ever-climate-protest-uk; Thornton, Twenty-Five Years of Domestic Case Law, Journal of Environmental Law, Vol. 25, No. 3, November 1, 2013, 531–546; Three Men Jailed over Fracking Protests, BBC News, September 26, 2018, sec. Lancashire. https://www.bbc.com/news/uk-englandlancashire-45652464; Tsanova, Italian Parliament Okays Retroactive Solar FiT Cuts, Renewables Now, August 11, 2014. https://renewablesnow.com/news/italian-parliament-okays-retroactive-solar-fit-cuts433823/; Vanhala, The Comparative Politics of the Courts and Climate Change, Environmental Politics, Vol. 22, No. 3, 2013, 447; Vidal, Not Guilty: The Greenpeace Activists Who Used Climate Change as a Legal Defence, The Guardian, October 9, 2008. https://www.theguardian.com/environment/2008/sep/ 11/activists.kingsnorthclimatecamp; Wood/Woodward, Atmospheric Trust Litigation and the Constitutional Right to a Healthy Climate System: Judicial Recognition at Last, Washington Journal of Environmental Law & Policy, Vol. 6, 2016, 633–683.

Contents I. Introduction ..................................................................................................... 1. Background to climate change litigation in the UK........................... 2. Early history of climate litigation in the UK: 1990s to the mid2000s.............................................................................................................. II. Litigating climate targets: holding the government to account............ 1. Plan B takes on the UK climate mitigation target.............................. 2. Human rights and climate change in the courts................................. 3. The path to net zero: winning the political battle, losing the legal battle .............................................................................................................. III. Litigating the transition to a low carbon society: clean energy, airports, and fracking..................................................................................... 1. Litigation on wind and solar projects.................................................... a) Local to global: litigating localised concerns................................... b) Litigation regarding government incentive schemes..................... 2. Anti-fracking cases .....................................................................................

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Part 4. Climate change litigation – National reports 3. Litigation against airport expansion....................................................... 45 IV. Criminal prosecution of climate activism: an emerging area of climate litigation.............................................................................................. 54 V. Conclusions and the future climate litigation in the UK ...................... 62

I. Introduction In recent years, there has been a flurry of climate change litigation around the world provoking significant interests for lawyers and non-lawyers. The Courts in the United Kingdom have kept away from the global spotlight in many ways, not producing any of the high-profile litigation such as the Urgenda1 case in the Netherlands, the Atmospheric Trust2 litigation in the United States, or the rights-based litigation in Pakistan3 . At the same time, there has been a growing suite of climate-related jurisprudence in the United Kingdom covering a breadth of different areas of law. In fact, as of 2019, the United Kingdom has the third most recorded climate litigation cases in the world.4 Perhaps because of the lack of ‘high profile’ cases, there is a gap in literature analysing climate litigation in the United Kingdom.5 However, the relatively high number of cases, among other reasons, means that there is a need to take stock of climate change litigation in this jurisdiction. 2 In this chapter, we analyse the emerging trends of climate litigation in the United Kingdom. We define climate litigation in this chapter as legal action brought before the Courts where climate change arguments are presented as part of the claimant’s or defendant’s case, or the subject and consequence of the litigation have an integral climate mitigation or adaptation impact. The types of litigation discussed in this chapter can be broadly categorised in three parts. First, public/administrative law litigation against the government’s climate targets and standards. Second, litigation stemming from a transition to a low-carbon society (that is, litigation against fossil fuel intensive projects and for low carbon projects). Third, criminal litigation against climate-related protests. We do not discount that there are other categories within the UK, but rather view these as currently the main categories. The cases discussed in this chapter provide an emerging jurisprudence that has provided both crucial wins, but also drawbacks for litigants. 3 There are several important reasons to take stock of the jurisprudential developments in the UK at the current juncture. First, to analyse the extent to which the surge of climate litigation around the world in recent years has had an impact on the Courts in the UK. Second, the Paris Agreement compliance period that begins from 2021 brings forward a new regime and era of climate governance that will see greater scrutinising of government climate actions both nationally and internationally. Third, the rise of activism on climate issues in the UK, most notably by the School Strikes and Extinction Rebellion, have raised climate change as a political issue and could pave the way for more public interest litigation. At the same time, these protests have resulted in 1

1 Urgenda Foundation v The State of the Netherlands, Rechtbank Den Haag [District Court of The Hague, Chamber for Commercial Affairs] (June 24 2015, Case No. C/09/456689/HA_ZA 13‐1396) (“Urgenda”). 2 Wood/Woodward, Washington Journal of Environmental Law & Policy, Vol. 6, 2016, 633–683. 3 Ashgar Leghari v Federation of Pakistan (W.P. No 25501/2015) Lahore High Court Green Bench. 4 Setzer/Byrnes, Global trends in climate change litigation: 2019 snapshot, 3. 5 Some exceptions include: Kaminskaite-Salters, in: Faure/Peeters (eds.), Climate Change Liability, 2011, 165–188; Hilson, in: Farrall/Ahmed/French (eds.), Criminological and Legal Consequences of Climate Change, 2012, 47–62; Vanhala, Environmental Politics, Vol. 22, No. 3, 2013, 447.

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disruptions that the state has sought to suppress through criminal prosecution, opening a nascent area of criminal litigation against climate activism, discussed in section IV. of this chapter.6 Finally, the UK’s imminent exit from the European Union will see a new era of political and economic relations, with potentially significant impacts for the UK’s climate and environmental standards and targets.7

1. Background to climate change litigation in the UK As mentioned above, to date, the UK has not seen many of the ‘high profile’ or ‘holy 4 grail’8 climate cases. Notwithstanding, there has been an increase of litigation with a direct climate element, on a variety of subjects and in different fronts. Hilson argues that one of the reasons for the high levels of climate litigation in the UK is because of the opportunities to push action via legal routes are perceived as stronger.9 Since the 1990s, the laws around standing in judicial review cases have become more favourable for environmental NGOs, allowing scope for public interest litigation. NGOs and community action groups in the UK also have a history of redressing claims through the courts in the UK for environmental matters. Until very recently, much of the legal mobilisation has concerned specific claims actions around particular industries, such as coal-fired power stations, airport expansion, waste incineration and windfarms. The inability to push for change politically meant that legal opportunities were much more desirable.

2. Early history of climate litigation in the UK: 1990s to the mid-2000s Climate litigation in the UK began in the early 1990s, with litigation concerning wind 5 farm development. The perceived negative visual impact of wind farms became a significant issue for local groups and councils. For example, in 1995, the Planning Inspector concluded in City of Bradford Metropolitan Council v Gillson & Sons10 that the contribution of renewable energy did not outweigh the harm to character and appearance of the surrounding landscape. The inspectorate often ruled this way during this period. Even in the mid-2000s, when climate change had become a much more prominent issue, the planning inspectorate often placed local concerns first. In 2007, in Bradford v West Devon BC11 the planning inspectorate acknowledged the importance of global warming but weighed this up against visual and landscape concerns and refused to give planning permission for two wind turbines. We discuss renewable energy development in section III.1. below, and trace the shifting pattern of such decisions. In the UK, many instances of climate litigation stem from judicial review, where the 6 claimants ask the court to review the lawfulness of a decision or action made by a public body. There are different types of climate-related judicial review claims that can arise.12 First, a review of decisions that implement or purport to implement regulations directly concerning climate change. This type of judicial review is the focus of section II. below, 6 Dearden, Extinction Rebellion Win High Court Challenge against Metropolitan Police as London Protest Ban Ruled unlawful, The Independent, 6 November 2019, available at https://www.independent.co. uk/news/uk/home-news/extinction-rebellion-protest-ban-london-high-court-case-metropolitan-policea9187186.html (accessed on: 13/05/2020). 7 See for example: Scotford/Bowman, King’s Law Journal 2016, 416. 8 Bouwer, Journal of Environmental Law 2018, 483 (484). 9 Hilson, in: Farrall/Ahmed/French, (eds.) Criminological and legal consequences of climate change, 2012, 47‐62. 10 City of Bradford Metropolitan Council v. Gillson and Sons [1995] 10 P.A.D. 255. 11 Bradford v. West Devon BC [2007] PAD 45. 12 Goldberg/Lord, in: Lord (ed.), Climate Change Liability: Transnational Law and Practice, 2012, 447.

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regarding litigating climate targets. Second, a review of decisions in spheres of public body activity where it is alleged that climate change issues arise. Third, a review of decisions of public bodies in relation to some activity that will be carried out by the private sector, where the decision has failed to take into account climate change factors. These are often decisions around planning, licensing and permitting of a development (such as the extension of an airport) that have climate change implications. We focus on this in section III. Fourth, challenges on ancillary matters such as the right to information and the right to protest.

II. Litigating climate targets: holding the government to account A significant area of climate litigation globally has been to hold governments to account for climate change-related policies, standards or targets. In recent years, these have also been some of the most talked-about cases. For example, in Urgenda13, the Dutch Government was taken to Court because its existing pledges to reduce GHG emissions were not seen as ambitious enough. Similarly, in Massachusetts v EPA14, states and cities in the United States brought a suit against the Environmental Protection Agency, the federal level agency that set standards under the Clean Air Act. These cases, often strategic, can be influential in pressing national governments to take stronger climate action. They can also be influential in setting a precedent that can lead to future branches of litigation. For example, the Massachusetts the precedent set on standing for climate suits paved the way for sub-national governments in the US to establish standing in future cases.15 8 In the UK, cases of this type are through judicial review, bringing legal action against a government law or policy directly concerning climate change. The enactment of the Climate Change Act 2008 (“CCA”) meant there was a legally binding target on the UK Government that was seen (at the time) as relatively ambitious. Bouwer suggests that the nature of the duties under the CCA on the government, if unfulfilled, still did not create scope for a ‘grand challenge’ against the state.16 However, in recent times there has been some interest in bringing such a challenge. In 2017, Plan B Earth, a charity that was established after the Paris Agreement, and eleven other claimants challenged the UK Government over failing to revise its 2050 carbon target under the Climate Change Act 2008 (“CCA”), after the Paris Agreement was signed in 2015.17 7

1. Plan B takes on the UK climate mitigation target 9

Plan B’s case focussed on the state’s obligations to update the climate mitigation goal under the CCA. Under the CCA the UK had a target to ensure that net UK carbon account for the year 2050 is at least 80 % lower than the 1990 baseline (“2050 Target”).18 However, the Secretary of State has the power to amend the 2050 target and this power may be exercised if it appears that there are “significant developments” in scientific knowledge or European or international law or policy (section 2(2)). In exercising this power, the Secretary of State is required to obtain and take into account the advice of 13

Urgenda, supra (fn. 1). Massachusetts v EPA 549 US 497 (2007). 15 Osofsky/Peel, Georgetown International Environmental Law Review 2013, 224. 16 Bouwer, Journal of Environmental Law 2018, 483 (488). 17 Plan B Earth and Others v Secretary of State for Business, Energy and Industrial Strategy [2018] EWHC 1892 (Admin) (“ Plan B v BEIS”). 18 Section 1(1) Climate Change Act 2008. 14

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the Committee on Climate Change, an independent body established under the CCA that is composed of experts.19 After signing the Paris Agreement, the Secretary of State consulted the Committee. 10 The Committee advised that the target should not be changed for the time being.20 Specifically, the Committee wrote that the current 2050 Target was already stretching what was achievable; that the Government had indicated it does intend at some point to set a net-zero target; and that the Committee concludes that this is too early to do so now, however this should be kept under review. In other words, hold off for now, concentrate on shorter-term targets under an 80 % GHG reduction by 2050, until we are in a position (or compelled to) scale up to net zero. In line with this, the Secretary of State did not revise the 2050 Target. It was this decision not to, as well as the advice given by the Committee, that the Claimant’s challenged in Court. The Claimants presented five grounds in their claim to the High Court. These 11 included that the Secretary should have revised the target under the legislative purpose of the CCA 2008, as well as human rights law-based arguments. The High Court rejected all of these, finding that the claims were not arguable and denied permission for the case to proceed. The Claimant’s also lost on appeal. The High Court found that the Secretary of State was correct in its understanding 12 that the Paris Agreement does not impose a binding legal target on the UK.21 The Claimant’s argued that the true purpose of the CCA 2008 was to commit the UK to make an “equitable contribution” to the global climate obligation that is consistent with prevailing scientific evidence and international agreement. Because of this purpose, the Secretary of State should have changed the 2050 Target. However, the High Court disagreed and found that CCA 2008 did not compel the Secretary of State to revise the target; this was an area where the Secretary had discretion. By having regard to the Committee’s advice and deciding not to revise the target, he had followed all the legislative steps and not done anything unlawful. Overall, the Court found that the case could not proceed because none of the grounds was arguable.

2. Human rights and climate change in the courts A novel aspect of the claim was invoking human rights-based arguments via the 13 Human Rights Act 1998 (and the rights under the European Convention on Human Rights that are incorporated within it). The Claimant’s asserted breaches of the right to life, the right to respect for one’s private and family life, and the right to protection of property. It was argued that if the Secretary of State continues to refuse to amend the 2050 Target, it will result in the violation of the human rights of the Claimants and others.22 However, the High Court did not entertain this claim, stating that it was an area 14 where the Secretary of state has a broad discretion to assess the advantages and disadvantages of any course of action.23 It was not an unlawful decision by the Secretary of State. Accordingly, human rights challenges were not sustainable.24 The Court of Appeal, while generally recognising the relationship between human rights and envir-

19

Section 3(1)(a) Climate Change Act 2008. Plan B v BEIS, supra (fn. 17), 11. 21 Plan B v BEIS, supra (fn. 17), 28. 22 Crow/Mackenzie, Statement of Facts and Grounds for Plan B Earth v Secretary of State for Business, Energy and Industrial Strategy [2018] EWHC 1892 (Admin) [177]. 23 Plan B v BEIS, supra (fn. 17), 49. 24 Plan B v BEIS, supra (fn. 17), 49. 20

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onment, upheld the decision of the High Court that as there was no error of law, there was no prospect of success on human rights grounds on an appeal.25 15 Invoking human rights arguments were clearly spurred on by the successful ruling in Urgenda and other international claims where human rights were used. The Statement of Facts cites the Urgenda decision, among others, demonstrating the transnational dimension of climate litigation.26 At the same time, the Plan B v BEIS, illustrates the limited scope of UK human rights and climate litigation under section 6 of the Human Rights Act. Section 6 places a duty on public authorities not to act incompatibly with certain rights and freedoms drawn from the European Convention on Human Rights (ECHR) (such as the right to life). Hence, a link was being made between the actions of the Secretary (to not change the 2050 Target in line with international policy and science) and the potential breaches to the right to life and other human rights. However, the Court only looked at whether the decision was unlawful and stated that the executive had a “wide discretion” to decide its course of actions. The Court did not go into whether the result of the decision (to not change the target) would result in breaches of human rights. 16 The reluctance of the Court, both on the point about human rights and more generally to substantively examine the target, reflects a general reluctance to broach into the executive’s broad area of discretion. The reluctance can also been seen in the judiciary in Ireland27 and demonstrates that for now, Urgenda remains an exception in how the Court dealt with these points. Nevertheless, while the Court avoided having to examine human rights in this instance, putting forward rights-based arguments is significant. As we will see in Heathrow Airport28 and other cases discussed later, rights-based arguments will continue to become more and more prevalent in climate litigation in the UK.

3. The path to net zero: winning the political battle, losing the legal battle Plan B v BEIS was not successful in getting the UK Government to revise its 2050 Target post-Paris through litigation. However, in June 2019 the UK Government did revise its 2050 Target from 80 % reduction of 1990 levels to a net-zero target. Accordingly, while Plan B lost the legal case, the goal of having the government revise the 2050 target was achieved. 18 The decision to revise the 2050 target eventually was upon a report in May 2019 by the Climate Change Committee that now recommended a net-zero target. Accordingly, the Committee had changed its position from 2016, where it advised that this was not necessary. It based this on the fact that existing pledges under the Paris Agreement illustrated an ‘emissions gap’. Hence the UK should ratchet up its ambition and send a strong signal to the rest of the world. It is also clear that the IPCC 1.5-degree report, published in October 2018, played an essential part in this decision. It is clear that the Committee took into account changes in both international law (as different commitments and pledges from countries that signed up to the Paris Agreement became clear) and understandings of scientific knowledge (through the IPCC’s 1.5-degree report) from 2016 to 2019, to update its recommendation that the 2050 Target should be revised. The changing position of international policy and science was fundamental to Plan B’s arguments in Courts. 17

25

Plan B v BEIS, supra (fn. 17), 49. Crow/Mackenzie, supra (fn. 22). 27 Friends of the Irish Environment CLG v Government of Ireland and the Attorney General [2019] IEHC 747. 28 R (on the application of Plan B Earth) v Secretary of State for Transport [2020] EWCA Civ 214 (“Heathrow”). 26

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Plan B claimed this as a victory, stating that there was no doubt that the legal action 19 made an impact.29 Undoubtedly, between 2016 and 2019, the rise in activism and consciousness around climate change in the UK provided the impetus for the revised target. Litigation in this sense is only one part of the larger project for organisations like Plan B. Vanhala observes that environmental NGOs in the UK (as in many other countries) tend to see the taking of a legal claim as merely one element of a multipronged approach to campaigning.30 Even where there is a high likelihood of a loss, litigation strategies are pursued. Cases lost in the courts are not necessarily political losses. Moreover, new innovative arguments are introduced and tested, paving the way for future battles.

III. Litigating the transition to a low carbon society: clean energy, airports, and fracking Although the Plan B v BEIS case was a rare example of litigation against the 20 Government’s mitigation targets, there is much more litigation over more discrete projects that affect the UK’s overall greenhouse gas emissions. Energy systems will have to go through significant transitions to mitigate climate change. Given this fact, there has been a considerable amount of litigation around energy projects, airports and other activity that has a climate impact. This section surveys the trends in these types of cases. In 2011, the UK Government set a target of 15 % of energy use from renewables by 21 2020. In order to meet the target, there has been a surge of energy generation projects around the country. Nevertheless, the rise in solar, wind, hydro, waste-to-energy projects around the country has been controversial at both the local and national level for a variety of reasons. Furthermore, projects that intensify the use of fossil fuels, such as airports and fracking, have also been contentious and brought litigation in the Courts.

1. Litigation on wind and solar projects As discussed earlier, some of the earliest climate litigation concerned wind projects in 22 the 1990s. The litigation around wind and solar projects are similar. These projects have often been unpopular with residents or local governments and have hence been the subject of litigation. However, there has been litigation with more national level concerns too. For example, when energy companies have litigated against the state, following government incentives for these industries being withdrawn or reformed. All of these types of cases have an important climate dimension, because of the urgency of scaling up a low-carbon transition. While there are other types of technologies that are also relevant here (such as waste-to-energy and biomass) and energy efficiency projects, we have chosen to stick to wind and solar as two of the most popular renewable energy technologies. a) Local to global: litigating localised concerns. Like many countries in the world, 23 renewable projects in the UK have often faced local concerns and opposition that have spilled into the Courts. In the UK, many of the claims are in planning law. Planning law generally encompasses the use and development of land, such as the administrative regulation and permitting of land to be used for low-carbon energy generation activity. 29 Stefanini, Climate Home News, 30 January 2019, available at https://www.climatechangenews.com/ 2019/01/30/end-road-uk-citizens-climate-case-rejected-appeal-court/ (accessed on 13/01/2020). 30 Vanhala, Environmental Politics, Vol. 22, No. 3, 2013, 447.

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Planning law in the UK has brought the majority of climate litigation in the UK usually regarding energy generation activity, airports, incinerators, or roads and urban expansion. 24 The focus of objections varies for different renewable energy technologies. For wind energy, adverse visual impacts have been a significant source of litigation. Jones finds that wind energy opposition has seen much higher rates of litigation around visual impact than in other countries with similar legal systems.31 She argues that this is because of the importance English planning policy has placed on conserving heritage.32 25 Early cases reflected strong concerns around protecting the visual benefits and the problematic planning framework for wind developers. In West Coast Wind Farms v Secretary of State and North Devon DC,33 the Court of Appeal upheld the decision to refuse permission to build two wind farms. The Planning Inspector34 had earlier stated, in reviewing the application, that: “while the greatest importance should be attached to the need to reduce CO 2 emissions and their adverse effects on global warming, these proposals are but 2 amongst many measures which would help in achieving that national policy aim. Accordingly, I do not accept that there is a national or local need for these particular proposals which could not be met elsewhere, and which would merit their being afforded the greatest weight.”35 The decision was controversial because it effectively allows planning authorities to refuse permission on any project because individual projects will do little to contribute to global greenhouse gases.36 26 Fortunately, since those early years, policy has moved forward considerably. The case law reflects this. For example, in Energiekontor,37 the Planning Inspectorate affirmed that the planning policy framework now has a “presumption of sustainable development” that meant that renewable projects should be approved as soon as possible, unless there is significant and demonstrable harm, and it does not matter if particular local areas had already “done its bit” in meeting climate targets.38 In other words, there was a much broader concern for the need for renewable energy. Similarly, in Macarthur v Secretary of State39, the High Court dismissed petitions by residents against a wind farm, placing a more favourable weighting on the need for renewable energy and the government policy on renewables. Thus, wind litigation has evolved, with Courts holding that policymakers should lend more weight towards the bigger picture of climate change. 27 Visual impacts are much less of an impediment for solar; however, the Courts do still have to weigh local and global concerns. In Lark Energy40, a solar power generator challenged the decisions to refuse its application to install a solar farm. On the question of local concerns about the solar farm, the Court stated that local objections do not “compel the decision maker to accept those objections”.41 The decision-maker does 31

Jones, Climate Law, Vol. 6, No. 3–4, 2016, 336. Ibid, 351. 33 [1996] JPL 767. 34 In English and Welsh planning law, the Planning Inspectorate hears appeals and related case-work under the applicable planning and environmental legislation. Note, planning law is different in each of the different countries within the United Kingdom. 35 West Coast Wind Farms v Secretary of State and North Devon DC, supra (fn. 33), 74–75. 36 Holder/Lee, Environmental Protection, Law, and Policy 2007, 701. 37 Energiekontor UK Ltd v East Lindsey DC [2013] P.A.D 37. 38 Ibid, 43. 39 [2013] EWHC 3. 40 Lark Energy Limited v Secretary of State for Communities and Local Government [2014] EWHC 2006 (Admin). 41 Ibid, 71. 32

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need to pay attention to local views but can grant permission despite strong local opposition. It should not give views “a significance they would not have otherwise had”.42 Providing substantial scope for decision-makers to consider broader policy implications of climate change. More recently, in 2019, in a case challenging a residential solar project, the Court stated climate change and renewable energy was a material planning consideration.43 The Court held that planning policy recognised the “positive contribution that could be made to climate change by even small-scale renewable energy schemes”.44 In this way, the cases above highlight the changing trend for planning litigation around 28 renewable energy in the UK, where earlier objections around localised (particularly visual) concerns are being given less weighting than the broader global concerns around climate. The cases demonstrate that this is because government policy itself has shifted on the matter, with the government bringing out clearer policy statements that compel planning decisions makers to encourage the development of low-carbon energy sources. b) Litigation regarding government incentive schemes. In order to encourage the 29 investment and deployment of low-carbon energy, the UK Government introduced various support schemes. Two such schemes are the Renewables Obligations (RO) and the Feed-in Tariff (FiT) scheme. However, government tinkering with these schemes, including their early closure meant that investors and businesses who had invested in the renewables market turned to the Courts to try to seek redress. The RO Scheme placed an obligation on all licensed electricity suppliers to produce 30 a certain amount of electricity from renewable sources. This scheme was targeted at larger projects. The FIT scheme, on the other hand, was targeted at small solar installations, guaranteeing a generation tariff for each unit of electricity generated and an export tariff for any surplus energy sold back to the grid. It primarily provided an incentive for individuals to install solar panels. Both schemes became very popular in the early 2010s, coinciding with the growth of solar globally. The popularity of the scheme, however, became its downfall. By 2014, the government stated that the RO scheme had become too expensive and there would be an early closure of the RO. This created a rupture for the growing renewable energy industry at the time. The broader context for renewables in Europe had already seen retroactive withdrawals of incentive schemes in Spain and Italy.45 Accordingly, this set a chilling effect on investment in solar in the UK. In 2014, Solar Century and three other renewable energy companies took the 31 Government to Court through a judicial review of its decision.46 It was claimed that Government statements assured investors and the public that the scheme would run until 2017, and this amounted to an ‘admissible assurance’, as well as created a ‘legitimate expectation’ that the Government could be held accountable for. However, claimant’s lost in the High Court and the Court of Appeal47.

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Ibid. R (on the application of McLennnan) v Medway Counsil [2019] EWHC 1738 (Admin.). 44 Ibid, 1739. 45 Pekic, Spain Publishes Retroactive PV FIT Cuts, PV Magazine, 21 February 2013, available at https:// www.pv-magazine.com/2013/02/21/spain-publishes-retroactive-pv-fit-cuts_100010298/ (accessed on: 14/ 05/2020); Tsanova, Italian Parliament Okays Retroactive Solar FiT Cuts, Renewablesnow, 11 August 2014, available at https://renewablesnow.com/news/italian-parliament-okays-retroactive-solar-fit-cuts-433823/ (accessed on: 14/05/2020). 46 Solar Century Holdings & Ors. v Secretary of State for Energy & Climate Change [2014] EWHC 3677 (Admin). 47 Solar Century Holdings & Ors. v Secretary of State for Energy & Climate Change [2016] EWCA 117. 43

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The specifics of the case concerning ‘assurance’ and ‘expectation’ are of less relevance to us. The relevant aspect for our purposes is that the High Court considered the “powerful public interest considerations” behind the decisions to reduce support to energy companies.48 However, public interest was limited to the government’s austerity measures, budgetary disciplines as the “considerations of the highest order”.49 The Court failed to consider the importance of the government’s statements and assurances that were the very foundation upon which many renewable energy companies invested.50 Moreover, there was scant attention to public interest in renewable energy generation and climate change mitigation. In Friends of the Earth51, a judicial review was successfully brought by the charity Friends of the Earth against the government on proposed retroactive changes to the FiT Scheme. Once again, the premise for the changes by the government was budgetary. The announcement (although merely at the consultative stage at the time) meant that many investors backed out of the scheme and left abandoned projects. In this instance, however, the claimant’s won on the basis that that the proposal, if implemented, would be retrospective and beyond the scope of the Secretary of State’s power. Nevertheless, by the time the ruling came, many projects had already been abandoned leading to severe losses. Finally, in Breyer Group52, a group of claimants took the government to Court over losses they suffered as a result of proposed changes to the FiT scheme. The focus of the case was primarily related to property losses suffered (as a result of the losses). The case was significant because it brought into focus Article 1 of the First Protocol (“A1P1”) of the European Convention on Human Rights (ECHR) that guaranteed a right to peaceful enjoyment of possessions. The claimant’s asserted that their rights were breached as a result of the proposed government policy changes. The Court had to consider whether there was an unlawful interference with their rights and if so, whether they were justified. Both the Court of Appeal and the High Court held that customer contracts that businesses had signed concerning solar PV installations were assets and therefore possessions. Accordingly, the Court of Appeal stated the government proposals to change the FiT Scheme, did interfere with the possessions of the claimants (thus affecting their rights under A1P1).53 However, the Court went on to consider whether this interference was ‘justified’. Here, the Court held that the proposals did not strike a fair balance between the public interest and the interests of the investors in the scheme. In weighing up the different factors, the Court considered the amount of budgetary saving for the government, the losses by the claimants, as well as statements by the government assuring investors that there would not be retrospective tariff changes54. The cases discussed above show how the Court’s balanced policy considerations. They demonstrate that the Court’s definitions of public interest and policy were limited to government budgetary constraints. For the Court, public interest did not include the Solar Century Holdings & Ors (High Court), supra (fn. 46), 90. Ibid, 86. 50 Muinzer, Environmental Law Review 2015, 131. 51 Secretary of State for Energy and Climate Change v Friends of the Earth [2012] EWCA Civ. 28. 52 The Department of Energy and Climate Change v Breyer Group PLC and Others [2015] EWCA Civ 408. For the High Court judgement see: Breyer Group Plc and Others v Secretary of State for Energy and Climate Change [2014] EWHC 2257. 53 The Department of Energy and Climate Change v Breyer Group PLC and Others [2015] EWCA Civ 408 71‐73. 54 Ibid, 88–100. See also the High Court judgement: Breyer Group Plc and Others v Secretary of State for Energy and Climate Change (n 55), 144–149. 48 49

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wider interest in developing renewables and decarbonising energy. In Breyer, the Court of Appeal expressly excluded considering the environmental effect in its balancing act.55 These cases can be contrasted with the planning cases discussed earlier. Although the practical impact of both types of litigation is on the capacity of renewable energy generation in the UK, here, litigation was largely fought on narrow technical points regarding the binding nature of government statements. Public interest was narrowly conceived on budgetary terms. Although, unlike a negative decision in a planning litigation, the decisions in Solar Century and Breyer do not mean that the development of a particular renewable energy project has been prohibited (unlike a planning case which does focus on whether an individual project will go ahead or not). But, its practical effects in reality are the same.56 On a separate note, Breyer is also significant because it also illustrates how a primarily commercial case can also invoke human rights. It provides an added dimension to how human rights can be relevant to climate change litigation. The litigation discussed above, illustrates the wide variety of climate litigation in the 37 UK. As demonstrated, judicial reviews brought largely on commercial grounds nonetheless have an essential climate change dimension. Investment into (and subsequent deployment of) renewable energy is vital to drive the societal transition required to respond to climate change. While the growth of renewables has been significant, the UK still consumes a significant amount of energy from gas and other fossil fuel sources. Accordingly, even though the cases were mainly brought based on financial losses, their knock-on effect on UK climate targets and clean energy transitions are significant and worthy of analysis.

2. Anti-fracking cases Apart from the development of renewable energy, the transition away from carbon- 38 intensive projects has also been contentious. Projects that involve accessing shale gas through hydraulic fracturing (or ‘fracking’) have been an area of much controversy in the UK. In the UK, fracking was carried out in 2011, but operations were halted due to an earthquake in the local area.57 A temporary moratorium was placed on fracking until 2012.58 Since then, there has been concerted activism against new fracking, bringing to the fore local and global environmental and climate concerns. Shale gas has often been purported as a ‘transition’ fuel away from fossil fuels because 39 of lower carbon emissions. In the UK context, an influential report in 2013 (‘the MacKay and Stone Report’), found that UK shale gas would have much lower emissions than coal and slightly lower emissions than imported gas.59 However, there were several assumptions to this study, including that there would need to be reductions in fossil fuels burned elsewhere and the capturing of fugitive methane emissions. The MacKay Report was influential on government policy and became a central part of recent antifracking litigation. 55 The Department of Energy and Climate Change v Breyer Group PLC and Others, supra (fn. 52), 93. On the other hand, the High Court judgement did take this into account. See: Breyer Group Plc and Others v Secretary of State for Energy and Climate Change, supra (fn. 52), 146. 56 Muinzer, Environmental Law Review 2015, 131. 57 Fracking likely Cause of Quakes in North-East B.C., Pressreader, 2 December 2018, available at https:// www.pressreader.com/canada/the-province/20181202/281642486239508 (accessed on: 14/05/2020). 58 Fracking Firm Ready to Press On With Extraction, BBC News, 2 December 2012, available at https:// www.bbc.com/news/uk-20571700 (accessed on: 14/05/2020). 59 MacKay/Stone, Potential Greenhouse Gas Emissions Associated with Shale Gas Extraction and Use, Department of Energy and Climate Change, 2013.

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In Claire Stephenson60, the UK Government’s planning policy framework was successfully challenged by an environmental campaigning group Talk Fracking. Specifically, the legality of adoption Paragraph 209a of the revised National Planning Policy Framework (NPPF)61 for England was challenged. Paragraph 209a (which was inserted in 2018) generally stated that there is a need to explore more shale gas in the context of energy security and transitions towards low-carbon futures. It was based upon the MacKay and Stone Report. The Claimants argued that there were significant updates in science and international climate policy since the MacKay and Stone Report and the Government had failed to adequately consider these issues when they undertook the public consultation to revise the NPPF. Submissions by environmental groups during the consultation had highlighted new studies, as well as the updates in international law and policy (particularly the Paris Agreement and the ratcheting up of climate mitigation). The Court agreed, stating that these materials were “never in fact considered relevant or taken into account”, but that it was “obviously material” including because of its climate effects.62 Claire Stephenson was a major win for environmental groups, as Paragraph 209a essentially provided a planning policy ‘greenlight’ for fracking projects. The government now must reconsider whether it wants to include such a revision to the NPPF and if so, it would have to carry out a proper consultation considering the most up to date science. Given the ruling and subsequent coverage of the issue, there would undoubtably be much opposition to such a provision. The Court stated that the Government must use the most up to date understanding from climate science and international policy. This included reports that environmental groups submitted to challenge the MacKay and Stone Report that showed more up to date climate impacts of fracking. The provided an example of how there is scope for groups to challenge the science that underpins government’s policy. Claire Stephenson was significant because in recent litigation against specific fracking exploration work, environmental groups have been unsuccessful in convincing the Court that Government decisions to do such work have been unlawful.63 In such specific cases, the Court has been reluctant to enter into actually ruling on matters of policy and decision making. Accordingly, it is important that the NPPF’s de facto endorsement of fracking, through paragraph 209a, was successfully challenged. With it being removed, local decision-makers would not be able to take it into consideration. For anti-fracking groups generally, climate litigation can be again seen one of the strategies, along with more direct activism. Ultimately, the public pressure raised through litigation and broader activism has seen fracking continuing to be a political issue. Thus, in the 2019 parliamentary elections, all the major parties in the UK election calling for either a temporary or permanent ban to fracking. The multi-pronged approach means the Government would be reluctant to bring paragraph 209a (or anything similar) back into the NPPF for now.

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Like fracking, the expansion of air travel through building airport runways is a significant climate-related issue and has been subject to controversy and protest in the 60 Claire Stephenson v Secretary of State for Housing and Communities and Local Government [2019] EWHC 519 (Admin) (“ Claire Stephenson”). 61 The NPPF sets out the Government’s planning policies for England and how these should be applied. 62 Claire Stephenson, supra (fn. 60), 67. 63 See for example: Preston New Road Action Group (Through Mrs Susan Holliday) v Secretary of State for Communities and Local Government & Ors [2018] EWCA Civ 9.

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UK. From a regulatory point of view, because aviation emissions are yet to be adequately regulated by international or national climate policy, there are valid questions of undoing climate mitigation elsewhere through airport expansion. Under UK law, aviation emissions do not count as part of UK’s greenhouse gas reduction targets under the Climate Change Act 2008. However, they “must be taken into account” (section 10(2)) leaving many open questions. The plans to expand Heathrow Airport have been a battleground for legal and political activism in recent years.64 In Heathrow Airport65climate change specific arguments were brought by NGO’s Plan B Earth, Friends of the Earth and WWF UK. The claims centred around the government’s decision to include a third runway at Heathrow in its Airport National Policy Statement (“ANPS”). The ANPS sets the policy framework for decision making on the permitting of airport projects. In other words, its decision provided a high level ‘green light’ for the third runway, notwithstanding a more specific consent process would take place for the project. Under English planning law, national policy statements such as the ANPS must take into consideration the UK government’s policy toward climate change. It was contended that government policies included not only the UK climate legislation (and its associated targets), but also the Paris Agreement. The Paris Agreement had a more aggressive temperature target that aims at holding the increase of global average temperatures to “well below” 2°C (above pre-industrial levels) and to pursue efforts to limit that increase to 1.5°C. The claimants argued, among other things, that if government policy is restricted to only domestic Climate Change Act, then the government’s policies would be lagging behind the latest (international) scientific knowledge. The case was heard on appeal at the Court of Appeal after the claimant’s lost at the High Court.66 At the High Court, it was held that ‘government policy’, for the purposes of the Act, did not include international climate change law and policy. Although international law may influence it, the Court ruled that UK government policy is the national carbon cap under the Climate Change Act 2008. Significantly, the Court of Appeal and held that the Paris Agreement must be “taken into account” in the decisionmaking process of issuing a national policy statement.67 The Court of Appeal stated that “even if the legal targets in the Climate Change Act were consistent with the Paris Agreement, it did not follow that, as a matter of law, the government was somehow precluded from taking into account the Paris Agreement”.68 The case is significant for several reasons. First, the Court of Appeal’s decision reflects the emerging importance of the Paris Agreement directly on domestic law and policy. To be sure, the impact of the decision is that the Paris Agreement will need to be ‘taken into account’ when the government decides on national planning policy statements in the future. National policy statements provide the high-level policy direction for domestic infrastructure and development projects (such as airports). Second, the Climate Change Act was originally designed with a global temperature limit of 2°C. However, the Paris Agreement has a more stringent aim. The Court of Appeal took this seriously, stating “it is clear, therefore, that it was the government’s expressly stated policy that it was committed to adhering to the Paris Agreement to limit the rise in global temperature to well below 2°C and to pursue efforts to limit it to 64 Aside from the case discussed in this chapter, see also: R (London Borough of Hillingdon) v Secretary of State for Transport [2010] EWHC 626 (Admin). 65 R (on the application of Plan B Earth) v Secretary of State for Transport [2020] EWCA Civ 214. (“Heathrow”). 66 R (Spurrier and Others) v Secretary of State for Transport [2019] EWHC 1070 (Admin). (“Spurrier”). 67 Heathrow, supra (fn. 65), 237. 68 Heathrow, supra (fn. 65), 203.

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1.5°C.”69Accordingly, the Court held that in the government’s decision making process, it needed to take the new global temperature target into consideration. It is an important reminder that the wording “1.5 degrees” only made it into the Paris Agreement after the tireless efforts of small island states and civil society activists.70 In this judgement, the practical impact of those words on domestic law can be observed, as the Court expressly held the government must take this into consideration. 50 Third, as with Plan B v BEIS discussed earlier in section II, rights-based arguments were used by the claimants. The High Court was not convinced of the rights-based claims. The decision to expand Heathrow at this stage was seen by the Court as a highlevel one that supports its expansion in principle.71 The High Court commented that rights in question (the right to private life and the right to enjoy property) were not absolute and able to be curbed “in the public interest” in a proportionate manner.72 Accordingly, while not convinced of rights-based arguments at this stage, the High Court stated that they could be important the permitting stage when details of how parties will be adversely affected by the scheme will be more detailed.73 At the Court of Appeal, WWF-UK argued that the impacts of Heathrow expansion would also impact the rights of a child.74 The Court decided not to rule on this point, as the broader point that the designation of Heathrow’s third runway needed to be reconsidered had already been won.75 Although the rights-based arguments did not bring any conclusive victories for the claimants, what these arguments again demonstrate is the transnational nature of climate litigation, as these arguments drew inspiration from rights-based climate litigation around the world.76 51 Nevertheless, it is important to note that effect of the Court of Appeal’s ruling is that the Government must now consider the Paris Agreement, if it wishes to reissue the ANPS. But, it may indeed come to the same conclusion and expand Heathrow. The Court points this out stating that “again we would emphasize that it does not follow from this that the Secretary of State was obliged to act in accordance with the Paris Agreement or to reach any particular outcome. The only legal obligation, in our view, was to take the Paris Agreement into account when arriving at his decision.”77 And again in its final paragraph, clearly reflecting an acknowledgement of the separation of powers between the executive and the judiciary, stating: “we have not decided, and could not decide, that there will be no third runway at Heathrow. We have not found that a national policy statement supporting this project is necessarily incompatible with the United Kingdom’s commitment to reducing carbon emissions and mitigating climate change under the Paris Agreement, or with any other policy the Government may adopt or international obligation it may undertake. That is not the outcome here. However, the consequence of our decision is that the Government will now have the opportunity to reconsider the ANPS in accordance with the clear statutory requirements that Parliament has imposed.”78

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The ruling is therefore procedural. The Government must follow the set procedure, 52 if it wishes to reissue the ANPS. This is an important distinction between Heathrow Airport and cases like Urgenda and Plan B v BEIS, discussed above, that were more substantial challenges to overall climate policy. Although there was understandable media attention comparing these cases, this distinction remains vital for practitioners and climate activists to keep in mind, as the Heathrow Airport judgement is more conservative than activist.79 In practice, it may indeed come to a different decision now as a result of litigation and political activism. As discussed in section II. above, the UK Government revised its 2050 Target from 80 % emissions reduction to a net-zero target. The original decision making for the ANPS, that were the subject of the litigation in Heathrow Airport, was before the net-zero target was adopted in June 2019. But, any decision to reissue the ANPS now must consider both the Paris Agreement and the ‘net zero’ target under the Climate Change Act. These are more stringent measures which may mean a different decision is reached. Therefore, the Heathrow Airport case demonstrates the multipronged nature of 53 climate litigation. Activists in the UK fought battles on the streets, through parliament and the courts for many years regarding Heathrow. The increase in climate activism influenced the adoption of the net zero target by the government in 2019. The net zero decision also linked to international climate policy, particularly the IPCC’s 1.5° Report. The Court of Appeal in Heathrow Airport placed importance on the Paris Agreement and the 1.5°C objective that was fought for by activists in Paris. Litigation is enmeshed in this wider context and climate litigation will remain one of several prongs to reach the goal of activists and NGOs to prevent the expansion of Heathrow.80

IV. Criminal prosecution of climate activism: an emerging area of climate litigation An emerging area of climate litigation is criminal action against climate related 54 protest and activism. In 2019, the UK saw the biggest climate protests in its history, coordinated together with global action.81 It can be expected that such activity will increase over time. The Courts in the UK have had to deal with ‘climate’ activism several times over the last 20 years. This section briefly outlines some of the main trends and cases. A significant case in this area was Kingsnorth 682, where six Greenpeace activists were 55 charged with causing criminal damage at a coal-fired station in 2008. The activists had scaled the chimney of Kingsnorth power station and tried to shut down it down. While charged with property damage, the activists successfully argued, based on the principle of ‘lawful excuse’ under section 5 Criminal Damage Act 1971, that they acted because the emissions of carbon would cause more significant damage to property than their 79

Heyvaert, British Policy and Politics at LSE 2020, 1–3. Laville, Fight against Heathrow Expansion on Verge of Victory, Says McDonnell, The Guardian, 17 October 2019, available at: https://www.theguardian.com/environment/2019/oct/17/heathrow-expansion-protest-on-verge-of-victory-says-shadow-chancellor (accessed on: 14/05/2020). 81 Taylor, ‘Enough Is Enough’: Biggest-Ever Climate Protest Sweeps UK, The Guardian, 20 September 2019, available at: https://www.theguardian.com/environment/2019/sep/20/enough-biggest-ever-climateprotest-uk (accessed on: 14/05/2020). 82 R v Hewke (Maidstone County Court, UK, No. T20080116, Sept 8 2008) [henceforth “Kingsnorth 6”]; Goldberg/Lord, in: Lord/Goldberg/Rajamani/Brunnee (eds.), Climate Change Liability: Transnational Law and Practice, 2009, 475. 80

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actions. The case was a breakthrough, with much attention to the novel use of climate change as a legal defence for protest to block fossil fuel generating activity.83 In the same year, in R v Bard and Ors84, twenty-nine protesters executed a plan to stop, occupy and unload a coal train on its way to a large coal-fired power station in Yorkshire. The protestors were charged with obstructing a train contrary to the Malicious Damage Act 1861. The defendant’s argued that their actions were necessary to stop on-going climate change. However, unlike in the case with the Criminal Damage Act, the Malicious Damage Act did not have a ‘lawful excuse’ provision. The necessity provision was much narrower in scope, moreover the judge refused to allow much of the climate change evidence the activists wanted to present in Court. Accordingly, the defendants were found guilty and convicted. As it turned out, the convictions were later quashed due to evidence being withheld by the police regarding improper undercover operations connected to the protests.85 However, the case illustrated the difficulty faced with justifying actions based on climate change, despite the favourable judgement in Kingsnorth.86 The scope for such an argument is very limited. Apart from defending their actions, sentencing is important aspect given the protestors are often merely exercising a right to peaceful protest. In R v Basto87, thirteen protestors were being sentenced for occupying Heathrow Airport, causing numerous delays and cancellations of flights. The activists had defended their actions on climate change grounds. At sentencing, the judge stated that the protestors had caused “excessive inconvenience” and gone too far with their actions.88 Nevertheless, the judge refused to imprison the activists for non-violent protests, giving credit for genuinely held beliefs and the consideration of safety during the protests.89 This reflects the longrunning trend of judicial restraint at giving peaceful protestors prison sentences, despite having the power to do so. While in general the Courts have resisted imprisonment sentences, in 2018 three anti-fracking protestors were given fifteen to sixteen-month sentences for occupying and halting fracking activities in the North of England.90 The sentences were controversial, given the non-violent nature of the protest. On Appeal, it was argued that the sentences were inappropriate and breached Article 10, European Convention on Human Rights that guaranteed a right to freedom of expression.91 The appeal judge agreed, quashing the prison sentences. Although ultimately freed, large questions are raised by the initial judgement in relation to how protestors are treated, as well as the considerably heavy policing and prosecution of the activists.92 Finally, the pre-emptive prevention of climate protests has also been an avenue of litigation. In Heathrow Airport Ltd & Ors v Garman & Ors93, Heathrow Airport sought an injunction against a probable campaign to occupy the vicinity of Heathrow Airport and thereby disrupt the operation of one of the busiest airports in the world. The 83 Vidal, Not Guilty: The Greenpeace Activists Who Used Climate Change as a Legal Defence, The Guardian, 11 September 2008, available at: https://www.theguardian.com/environment/2008/sep/11/activists.kingsnorthclimatecamp (accessed on: 14/05/2020). 84 R v Bard and Ors [2009] Leeds Crown Court. 85 R v Bard and Ors [2014] EWCA Crim 463. 86 See also: Long/Hamilton, Stanford Environmental Law Journal, Vol. 38, 2019, 57‐115. 87 R v Basto (2016), Uxbridge Magistrate Court. 88 R v Basto (24 February 2016) (Sentencing) West London Magistrates Court. 89 Ibid, 40. 90 Three Men Jailed over Fracking Protests, BBC News, 17 October 2018, available at: https://www.bbc. com/news/uk-england-lancashire-45888172 (accessed on: 14/05/2020). 91 R v Roberts (Richard) [2018] EWCA Crim 2739 [5]. 92 Hawkins, Environmental Law Review 2019, 131. 93 [2007] EWHC 1957.

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intention of the environmental group was to disrupt airport activity during a ‘climate camp’ that was to be held in the vicinity with workshops and educational activities alongside direct action. The Court was willing to grant injunctive relief for trespass, and nuisance that prevented the protesters from disrupting or impairing the operation of the airport. Unlike in Kingsnorth 6, the protestors here did not have any ‘necessity’ defence that they could avail to defend their actions based on preventing climate change. However, in a positive spin-off, the media attention over the case meant that there was considerable rise in publicity and attention for the camp.94 Most recently, the widespread, decentralised Extinction Rebellion (“XR”) movement 60 across the UK saw climate protests back in the Courts in a significant way. In October 2019, in the wake of continuous protests across London, the Metropolitan Police issued an order under section 14 of the Public Order Act 1986 to outlaw “any assembly linked to the Extinction Rebellion ‘Autumn Uprising’” across the city.95 Such a widespread ban was controversial and immediately appealed.96 The Police order was a blanket ban on all XR linked protests, without specifying a location or timing. The order treated the series of protests as one single ‘public assembly’. This was ostensibly because XR was decentralised network, with protests of different sizes across town at different times of the day. But this broad-based approach to preventing peaceful protest resulted in the Police order being deemed unlawful by the Court. The Court stated that “separate gatherings, separated both in time and by many miles, even if co-ordinated under the umbrella of one body, are not one public assembly within the meaning of [the Act].”97 The cases discussed here demonstrated that the Courts in the UK are having to deal 61 increasingly with climate-related protests. The discussion in earlier section demonstrated how climate change policy changes (for example, the adoption of a net-zero target by the UK Government) was driven by not only litigation on the subject (Plan B v BEIS), changes in international law, policy and science, but also shifts in public and political consciousness through protest action. In this context, protecting the right to protest is integral to driving climate action. The Courts in the UK have generally demonstrated strong protection of a fundamental right to peacefully protest. Prison sentences for such action remain rare. Climate-related defences are often used by the defendants, however are rarely successful. At the same time, the role of the police in cracking down on climate-related protests in the UK will mean litigation will continue in this area and test the Courts. Research has shown that anti-fracking protest in the UK has been subject to the heavy hand of the Police.98 Recently, it was revealed that the counter-terrorism police had placed XR, Greenpeace and other climate-related protests groups in a list of ‘extremist ideologies’ alongside right-wing and neo-Nazi groups.99 This is an expanding sub-area of climate change litigation that deserves more attention. Albeit, it needs to be analysed and understood with wider literature on political protest in the UK and internationally. That depth of analysis is beyond the scope of this chapter.

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Hilson, Environmental Politics, Vol. 25, 2016, 259. Gayle, Police Ban Extinction Rebellion Protests from Whole of London, The Guardian, 14 October 2019, available at: https://www.theguardian.com/environment/2019/oct/14/police-ban-extinction-rebellion-protests-from-whole-of-london (accessed on: 14/05/2020). 96 Baroness Jenny Jones v Commissioner for Metropolitan Police [2019] EWHC 2957 (Admin). 97 Ibid, 71. 98 Jackson/Gilmore/Monk, Critical Social Policy, Vol. 39, 2018. 99 Grierson/Scott, Extinction Rebellion Listed as ‘key Threat’ by Counter-Terror Police, The Guardian, 19 January 2020, available at: https://www.theguardian.com/environment/2020/jan/19/extinction-rebellion-listed-as-key-threat-by-counter-terror-police (accessed on: 14/05/2020). 95

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A few concluding points can be made to summarise the trends and challenges discussed above, as well as look ahead to the future of climate litigation in the UK. First, a “grand challenge” to UK’s climate mitigation goal remains elusive and may be unlikely any time soon. The adoption of the net zero emissions target in 2019 will cooloff such litigation in the short term. Moreover, academic commentators have argued, and case law has so far proven, that such challenges are difficult under the UK’s Climate Change Act 2008. On the other hand, the urgency of bringing the date to achieve a net zero target forward from 2050 will increase in future years as the impacts of climate change increasingly materialise and if international pressure mounts. Holding the government to its newly adopted target will provide avenues for litigation in the future. Second, most climate litigation in the UK will continue to be around the transitions to a low-carbon economy. The discussion in section III. demonstrated that planning policy has changed over the last two decades to encourage the development of lowcarbon energy. With the adoption of the net zero target, there needs to be a significant ramp up in policy across all sectors, accounting for both more low-carbon energy generation, but also carbon removal, and afforestation.100 This will bring new forms of litigation, as new technologies (such as carbon capture and storage) and the scale of infrastructural change, will continue to test local to global tensions and challenge existing planning laws and regulations. Moreover, it will also challenge the approval of fossil fuel generating projects. For example, in early 2020 a claim has been brought against a gas fired power station in Yorkshire.101 Third, the role of the judiciary vis-à-vis the executive may well become more contentious. To date the judiciary in the UK has usually tried to steer clear of the politics of environmental decision making. Thornton, for example states, in relation to environmental litigation, the courts have “tended to adopt a relatively ‘hands off’ deferential approach” to decisions made by environmental decision-makers.102 As discussed earlier, Plan B v BEIS or Heathrow Airport, illustrate the same. But the default position may be tested if the government falls behind the level of transition that is being demanded both by its own policies, the public, and international science and policy. Fourth, this chapter also demonstrate that claimants are bringing rights-based arguments into Courts, in line with the broader trend of rights-based litigation.103 However, as discussed earlier in relation to Plan B v BEIS and in Heathrow Airport, the judiciary in the UK so far has not been as receptive to these arguments. In section III. it was also highlighting how these arguments were also relevant to commercial cases, where the right to possession was being challenged. Furthermore, as already discussed, criminal litigation related to climate protests will continue to rise with the increasing public consciousness around climate issues. The protection of a range of human rights related to the freedom of expression and right to protest will be tested in front of the Courts. Fifth, litigation around climate adaptation has not featured prominently in relation to climate litigation in the UK to date. Like many countries in the Global North, 100 Committee on Climate Change, Net Zero: The UK’s Contribution to Stopping Global Warming, 2 May 2019, 11–12. 101 Carrington, UK sued for approving Europe’s biggest gas power stations, The Guardian, 30 January 2020, available at: https://www.theguardian.com/environment/2020/jan/30/uk-sued-for-approving-europes-biggest-gas-power-station (accessed on: 14/05/2020). 102 Thornton, Journal of Environmental Law, Vol. 25, 2013, 538. 103 See: Peel/Osofsky, Transnational Environmental Law, Vol. 7, 2017, 37–67.

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adaptation is not yet a major issue unlike those in the Global South who have been dealing with adaptation for much longer. Yet, floods in recent years have illustrated that adaptation is becoming an issue. Government policies in this regard will be increasingly scrutinised. Moreover, already villages in Wales are scheduled to be “decommissioned” by 2050 and residents repopulated to different areas.104 These sorts of issues will result in avenues of litigation against the government’s adaptation policies, as well as strengthen the possibility of new rights-based claims. Finally, there is also the possibility that the UK Courts will be a forum for suing 68 corporations for climate change. Internationally there is an expanding potential for claims against corporations due to the rapid changes discursive, scientific, institutional and constitutional context of climate change.105 Specifically in the UK, there is potential for multinational corporations to be sued for their actions in other countries. In a landmark judgement in 2019, the UK Supreme Court recognised that UK parent companies could be tried in English Courts for the activities of their subsidiaries overseas.106 Accordingly, there is scope for litigation against UK based multinationals companies for environmentally harmful and carbon polluting activities by their subsidiaries in other countries. As stated in the introduction of this chapter, the UK has had a steady range of 69 climate litigation, without any high-profile litigation that has been in the global spotlight. The discussion above has illustrated the breath of cases that are being litigated in the UK. Climate litigation in the UK will continue to provide such a breath of cases, but we believe with much more intensity and scope for greater judicial scrutiny. Climate litigation in the UK provides lawyers, researchers and activists from outside the UK a rich jurisprudence of case law to examine, analyse and draw both lessons and opportunities from. 104 Jones, Sea-Threatened Villagers Call for Answers, BBC News, available at: https://www.bbc.com/ news/localnews/2643958-llanrug/5 (accessed on: 14/05/2020). 105 Ganguly/Setzer/Heyvaert, Oxford Journal of Legal Studies, Vol. 38, 2018, 841–868. 106 Vedanta Resources PLC and another v Lungowe and others [2019] UKSC 20.

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P. Climate change litigation in Italy Bibliography: Bouwer, The Unsexy Future of Climate Change Litigation, 30(3) J. Environ. Law 483 (2018); Butti, The Precautionary Principle in Environmental Law, Giuffré, 2007; Chamberlain, Beyond Litigation: The Need for Creativity in Working to Realise Environmental Rights, in: Voigt (ed.), International Judicial Practice on the Environment: Questions of Legitimacy, Cambridge: Cambridge University Press 2019, p. 443; Jacometti, La sentenza Urgenda del 2018: prospettive di sviluppo del contenzioso climatico, 1 Rivista giuridica dell’ambiente 121 (2019); Peel and Osofsky, Litigation as a Climate Regulatory Tool, in: Voigt (ed.), International Judicial Practice on the Environment: Questions of Legitimacy, Cambridge: Cambridge University Press 2019, p. 311; Savaresi and Auz, Climate Change Litigation and Human Rights: Pushing the Boundaries, 9 Climate Law 244 (2019).

Contents I. Introduction ..................................................................................................... II. Regulatory and planning framework on climate change in Italy ........ 1. Mitigation measures................................................................................... 2. Adaptation measures ................................................................................. III. “Giudizio universale” (the last judgment): a high-profile case to be litigated by the first months of 2020 .......................................................... IV. Local court cases that are relevant to climate change litigation in Italy .................................................................................................................... V. Conclusion........................................................................................................

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I. Introduction 1

If we consider high-profile cases involving the central Government’s liability, climate change litigation has been particularly “unsexy”1 in Italy so far. Such cases have not been brought before the Court, and the national legal literature does not discuss the issue in depth2. However, looking at it more broadly and in detail, two developments demonstrate that the situation is evolving. For one, in 2019, the first national high-profile case was announced in some detail, though not yet prosecuted. Secondly, between 2017 and 2019 a number of local Court decisions addressed cases directly related to climate change. This country report will begin with a short description of the existing Italian legislation and planning strategy on climate change. After that, it will examine the high-profile mitigation case and the existing local cases.

1

Bouwer, J. Environ. Law 2018, 483. Jacometti, Rivista giuridica dell’ambiente 2019, 121, argues that the Urgenda case might function as a global-scale precedent, based on human rights and thus capable of informing decisions in countries like Italy. In the same vein, see recently: Savaresi/Auz, Climate Law 2019, 244. But some authors argue that litigation is not a strategy that is “well suited” to human rights work in general and to the environmental sector in particular (see Chamberlain, in: Voigt (ed.), International Judicial Practice on the Environment: Questions of Legitimacy, 2019, 443. 2

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II. Regulatory and planning framework on climate change in Italy Both as a Member State of the European Union and as a Party to the UNFCCC 2 Convention3, Italy is addressing climate change in a number of different ways, such as by reducing its greenhouse emissions, increasing use of renewable energy, and improving energy efficiency.

1. Mitigation measures Italy implemented the Kyoto Protocol by ratifying Law No. 120/2002, with which the Italian Parliament required the Government to present and constantly update a National Plan to reduce greenhouse gas emissions. Directive 2003/87/EC was not fully implemented until 2006, when Italy finally adopted the Legislative Decree No. 216/2006, entrusting the management of the national system of emission quotas to a National Committee set up within the Environment Ministry. The system was and still is managed with the help of two main instruments: the National Allocation Plan of quotas (drafted every five years by the Committee and approved by the Ministries of the Environment and of the Economic Development) and the National Register of quotas to account for their release, possession, relocation, restitution or removal (managed by ISPRA – the Italian Institute for Environmental Protection and Research). After the EU revised the system by adopting Directive 2009/29/EU (EU Emission Trading System – EU ETS), Italy fell behind again, implementing it only in 2013 by means of Legislative Decree No. 30/2013, which repealed the previous Legislative Decree on ETS. The same decree entrusts ISPRA with managing the National Register, adopting a low-carbon development strategy in order to support the progressive de-carbonization of the national economy, and meeting the target of reducing GHG emissions by 80 % to 95 % from 1990 levels by 2050. In the changed context created by the EU Climate Energy Package 20-20-20 and the Doha Amendment to the Kyoto Protocol4, Italy was asked to: – reduce its annual quota of GHG emission for the period 2017–2020 (Decision 2013/ 162/UE, further revised by Decision 2017/1471/UE), in order to achieve the 20 % reduction target for Europe as a whole; – reach the 13 % reduction target, compared to 2005 (Decision 2009/406/EU – the socalled Effort Sharing Decision), for emissions not included in the EU-ETS; – reach the goal of 17 % of energy from renewable sources (Directive 2009/28/EU)5. In order to encourage the development of renewable sources and reach the 2020 target, Article 4 of Legislative Decree No. 28/201 provides, among other things, that the construction and operation of power plants producing energy from renewable sources shall be regulated by simplified and accelerated administrative procedures (e.g. the “Single Authorization” and the “enabler Simplified Procedure”). After having adopted

3 Italy ratified the United Nations Framework Convention on Climate Change by means of Law No. 65/1994. 4 Italy ratified and implemented the Doha Amendment by means of Law No. 79/2016. 5 In order to know Italy’s current status concerning its implementation of the Climate Change policies: https://ec.europa.eu/environment/eir/pdf/report_it_en.pdf; https://climateknowledgeportal.worldbank. org/country/italy; https://apps.who.int/iris/bitstream/handle/10665/260380/WHO-FWC-PHE-EPE-15.52eng.pdf;jsessionid=A17BF0C00743B8E1AD8E7A6C4B82159B?sequence=1; http://www.isprambiente.gov. it/files2018/pubblicazioni/rapporti/R_283_18_NIR2018.pdf.

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an Energy Efficiency Action Plan6 (2007) and a Renewable Energy Action Plan7 (2010), Italy finally adopted its first National Energy Strategy – NES8, by means of the Interministerial Decree of 8 March 2013. Just as the EU has been considering the 2030 targets since 2014, adopting the 2030 Climate and Energy Framework and then presenting the Clean Energy Package, so has Italy. According to the new Italian National Energy Strategy – NES9 adopted in 2017, Italy was initially committed to reaching the following targets by 2030: – deriving 28 % of energy from renewable resources in total energy consumption (reaching a 55 % share of renewable resources in electricity consumption); – achieving 30 % saving in energy; – improving the security and flexibility of the energy supply; – accelerating the decommissioning of coal-fired thermal power plants by 2025; – doubling research and development investments (R&D investments) in clean-energy technologies to reach € 444 million in 2021. On the emission front, in accordance with EU laws and the Paris Agreement10, Italy must reach the following targets by 2030: – for sectors included in the EU-ETS, reducing GHG emissions by at least 40 % compared to 1990 levels (Directive 2018/410/UE); – for sectors not included in the EU-ETS, reducing emissions by 33 % compared to 2005 levels (Regulation 2018/842/EU, the new Effort Sharing Regulation). However, last year, the Climate Change Performance Index – Results 201911 gave Italy only a “medium rating” for its performance in the GHG Emissions and Renewable Energy categories. Indeed, according to the Index, “Italy has managed to reduce its energy use per capita considerably over recent years and rates high on Energy Use. National experts criticize the lack of ambition in the targets for emission reductions, renewables and energy efficiency set out in Italy’s 2017 National Energy Strategy. They commend Italy for its decision to phase out coal power by 2025 but note that implementation measures are lacking, and that cuts to incentives and regulatory uncertainty are hampering the renewable energy sector”. These and other criticisms led the Italian Government to revise the goals set by the National Energy Strategy when drafting the National Energy and Climate Plan –

6 The Energy Efficiency Action Plan is available (in Italian) at the following link: http://www.sinanet. isprambiente.it/gelso/files/piano-efficienza-energetica-2007.pdf. 7 The Renewable Energy Action Plan is available (in Italian) at the following link: http://www.sinanet. isprambiente.it/gelso/files/piano-nazionale-energie-rinnovabili.pdf. 8 The NES is a programming document offering guidance within the energy sector. The 2013 Strategy is available (in Italian) at the following link: https://www.mise.gov.it/images/stories/normativa/20130314_Strategia_Energetica_Nazionale.pdf. 9 The new NES was adopted by means of Interministerial Decree of 10 November 2017. For more information: https://www.mise.gov.it/images/stories/documenti/BROCHURE_ENG_SEN.PDF and https:// www.eera-set.eu/wp-content/uploads/Italian-National-Energy-Strategy-2017.pdf. 10 Italy ratified the Paris Agreement by means of Law No. 204/2016. Note that Article 3 of Law No. 204/2016 deals with the Italian contribution to the Green Climate Fund – GCF (Fund established during COP 16 in order to direct financial resources towards developing countries and catalyse private climate funding), authorizing the Italian Environmental Minister to ensure Italy’s participation in the Fund to an extent of 50 million euro for each year from 2016 to 2018. For more information: https:// www.minambiente.it/pagina/green-climate-fund-0. 11 For more information: https://www.climate-change-performance-index.org/sites/default/files/documents/ccpi-2019-results-190614-web-a4.pdf; and https://www.climate-change-performance-index.org/sites/default/files/documents/italy_scorecard_ccpi_ 2019_1.pdf.

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NECP12 for the years 2021–2030, submitted to the Commission (behind schedule) on 8 January 2019, pursuant to the new Regulation on the Governance of the Energy Union and Climate Action (Regulation 2018/1999/EU). The Plan delineates the main 2030 objectives as follows: – a 33 % reduction of GHG emissions in non-ETS sectors (compared to 2005); – a 30 % increase of energy from renewable sources (compared to 2005); – a 43 % increase in energy efficiency (compared to 2007). The table below compares the main Italian 2030 targets with both the 2030 targets of 12 the EU as a whole and the Italian 2020 targets.

GHG emissions

Energy efficiency

Renewable sources

2020 targets

2030 targets

EU

Italy

EU

Italy

Share of energy from renewable sources in gross final consumption

20 %

17 %

32 %

30 %

Share of energy from renewable sources in gross final consumption in transport

10 %

10 %

14 %

21,6 %

+1,3 % per year (approx.)

+1,3 % per year (approx.)

Share of energy from renewable sources in gross final consumption in heating and cooling Reduction of primary energy consumption compared to PRIMES 2007 scenario

−20 %

−24 %

−32,5 % (approx.)

−43 % (approx.)

Savings of final consumption by means of energy efficiency obligation schemes

−1,5 % per year (without transport)

−1,5 % per year (without transport)

−0,8 % per year (with transport)

−0,8 % per year (with transport)

Reduction of GHG, compared to 2005, for all plants bound by ETS legislation

−21 %

Reduction of GHG, compared to 2005, for all nonETS sectors

−10 %

Overall reduction of GHG compared to 1990 level

−20 %

−43 %

−13 %

−30 %

−33 %

−40 %

Source: Draft of the Italian NECP submitted to the Commission on 8 January 2019

12 For an overview of the Italian Plan presented at the beginning of the 2019: https://www.minambiente.it/sites/default/files/archivio_immagini/Sergio_costa/Comunicati/draft_necp_ presentation_by_italy_v10.pdf and https://www.eera-set.eu/wp-content/uploads/Cristina-TOMMASINO_Italian-NECP.pdf; for the full text: https://ec.europa.eu/energy/sites/ener/files/documents/ec_courtesy_translation_it_necp.pdf.

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According to the EU Commission, which published its assessment of Member States’ draft Plans in June 201913, the Italian plan is well developed and very ambitious in several respects14. Nevertheless, it does not seem to meet all the requirements established by Regulation 2018/1999/EU15. 14 Indeed, the Commission noticed a lack of sufficient detail. The final Plan should be clearer and more detailed on the policies and measures to be adopted in order to achieve each target. It should provide benchmarks and indicators in order to allow for the measurement of results and control in the future. It should explore some central topics further, namely research funding, electric interconnectivity, regional cooperation in the Adriatic area, actions to phase out energy subsidies, social effects of decarbonization in terms of employment, income distribution, and energy poverty. The plan should also further strengthen targets. Finally, concerning energy security, even if Italy plans to reduce import dependence by increasing the use of renewable sources and energy efficiency efforts, the Commission pointed out the contradiction between the stated “full de-carbonization goal by 2050” and the use of gas as the main source in the future energy mix. 15 Italy was supposed to take the Commission’s recommendations and assessment into consideration when finalizing the Plan by the end of 201916. On 3 August 2019, the Prime Minister’s Office communicated the opening of public consultation on the Plan within the Strategic Environmental Assessment procedure17. 13

2. Adaptation measures18 16

Aware of the inevitable challenges that the entire world will face in the next years due to climate change, and in line with the EU Strategy for Adaptation to Climate Change (EUAS), Italy also adopted its own National Adaptation Strategy – NAS19, based on three main documents: – “Report on the state of scientific knowledge on impacts, vulnerability and adaptation to climate change in Italy”; – “Analysis of the EU and national legislation relevant to impacts, vulnerability and the adaptation to climate change”; – “Elements for a National Strategy for Adaptation to Climate Change”. 13 For more information: European Commission – Press release, Energy Union: Commission calls on Member States to step up ambition in plans to implement Paris agreement, Brussels, 18 June 2019 (https://europa.eu/rapid/press-release_IP-19-2993_en.htm). According to this press release, after an evaluation of Member States’ aggregated contributions to meeting the EU targets, the Commission found that even if national plans already represent significant efforts, considering that it is the first time that Member States have been asked to prepare them, none of the drafts are perfect: “As they stand, the draft NECPs fall short both in terms of renewables and energy efficiency contributions”, and therefore “reaching the EU’s overall climate and energy goals will require a collective step up of ambition”. 14 Source: European Commission, Commission Staff Working Document – Assessment of the draft National Energy and Climate Plan of Italy (SWD(2019) 264 final) (https://ec.europa.eu/energy/sites/ener/ files/documents/it_swd_en.pdf). 15 European Commission, Commission Recommendation of 18.6.2019 on the draft integrated National Energy and Climate Plan of Italy covering the period 2021–2030, 2019 (C (2019) 4412 final).(https://ec. europa.eu/energy/sites/ener/files/documents/it_rec_en.pdf). 16 The Regulation requires Member States to take all recommendations from the Commission into account in finalizing their plans, otherwise they have to provide reasons for not addressing them. 17 Link to the Italian Official Journal https://www.gazzettaufficiale.it/eli/id/2019/08/03/19A04977/sg. 18 In order to know the current status in Italy with regard to its implementation of the Adaptation Policy: https://climate-adapt.eea.europa.eu/countries-regions/countries/italy. 19 Strategy adopted by means of Directorial Decree of the Environment Ministry No. 86/2015. The Strategy is available (in Italian) at the following link http://www.minambiente.it/sites/default/files/archivio/allegati/clima/documento_SNAC.pdf.

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A National Adaptation Plan – NAP for the implementation of the NAS is currently 17 under development20. It should be a strategic tool useful not only to fight climate change, but also to make Italy more resilient and competitive from an economic point of view, coherently integrating other strategies already in place.

III. “Giudizio universale” (the last judgment): a high-profile case to be litigated by the first months of 2020 In Italy, a group of activists has been working for over a year to enable the launch of a first major collective action against the State, aimed at demanding more effective action to combat climate change21. The project is called “last judgment”. Its promoters complain that the Italian State has not “adopted sufficiently stringent measures to stem climate change and reverse the process”. In particular, these critics point out that – as an ISPRA study shows22 – Italy is part of the so-called group of developed countries, those that historically are the largest contributors to global greenhouse gas emissions. Compared to 1990, Italian emissions have been reduced by just 17.4 %, while already in 2007, the IPCC called for developed countries to reduce emissions by 25–40 % by 2020. Moreover, part of the reduction that occurred is attributable to the economic crisis of 2008 and the consequent drop in production, as well as to the relocation of some production sectors abroad, and not to effective climate policies. The promoters also point out that the geography and topography of the Italian territory lead to extremely tenuous conditions when confronted with climate change. The Mediterranean area is in fact particularly at risk, as it heats faster than the rest of the world, and with a global warming of 2°C would see the already scarce availability of water reduce significantly. The Alpine region is also considered an area especially endangered by climate change. It is believed that the balance of ecosystems would be severely compromised and that hydro-geological risks would increase. The rise in global sea levels will also exacerbate existing problems in areas such as Venice, Liguria, and all regions bordering the sea. The promoters’ intention is to file the writ of summons by the first months of 2020. Of course the legal action will also take into account recent government measures. As for the public profile, the promoters of this project are currently engaged in initiatives to raise awareness, aimed at collecting mandates from among citizens, associations, and the very young (represented by parents) who want to join the lawsuit. The Last Judgment was first publicly presented on 5 June 2019. The public appeal related to the case currently counts more than one hundred signatures of associations, committees, and various, more or less informal, groups, and more than eleven thousand signatures of citizens who have declared their support. The proponents have chosen not to ask for reparations or other forms of economic compensation but instead demand that the state adhere to scientific requirements for 20 A draft of the Plan is available (in Italian) at the following link: https://www.minambiente.it/sites/default/files/archivio_immagini/adattamenti_climatici/documento_pnacc_luglio_2017.pdf. At the following link a “scoreboard” drafted by the EU on Italy’s adaptation preparedness is available: https://ec.europa.eu/clima/sites/clima/files/consultations/docs/0035/it_en.pdf. 21 Information on the project is constantly updated (in Italian) at the following link: https://giudiziouniversale.eu/. 22 The study is available (in Italian) at the following link: http://www.isprambiente.gov.it/it/temi/ cambiamenti-climatici/landamento-delle-emissioni.

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keeping global warming beneath the critical threshold of +1.5°C, compared to the levels of average temperatures in pre-industrial times. The parties supporting this claim are not in fact interested in receiving compensation but in securing the future. If this demand is accepted, it will entail a legal recognition that the state’s climate policy must meet the standards set by the scientific community and that any less effective policy poses a threat to fundamental human rights. However, the promoters argue that the importance of the case goes beyond the legal action itself. In their view, it is also a tool for raising awareness, spurring citizens to action concerning the climate issue, and encouraging understanding of these topics. Overall, therefore, the legal action that will soon be brought against the government in Italy is based on a combination of the two different approaches described in the literature on climate litigation: the approach based on a purely legal strategy, and the socio-political approach, whose main objective is to involve the public in a collective action for change.23 The actual start of the legal action will probably suffer some delay due to the recent approval of Decree Law 111 of 14 October 2019 (“Climate” Law Decree, ratified by the Parliament with Law 141 of 12 December 2019). This regulatory intervention has been renamed the “Climate” Decree precisely because its stated objective – as the recitals at the beginning of the text demonstrate – is not only to settle pending environmental infringement proceedings opened by the EU against Italy (proceedings no. 2014/2147 and 2015/2043) but also to “deal with the climate emergency”. To this end, the decree in question, as converted into law, today provides: – the adoption of a National Strategic Programme to combat climate change and improve air quality consistent with the commitments deriving from European legislation (in particular Directive 2008/50/Ce) and the work carried out at the international level by the IPCC within the United Nations. Precisely because it has been adopted in order to tackle the climate emergency, it will also have to be coordinated with the Integrated National Energy and Climate Plan (PNIEC) and with basin planning for hydrogeological disruption; – the adoption of measures aimed at raising the population’s awareness and its involvement in reducing activities that adversely affect the environment, for example through training and information in schools; – the adoption of measures to encourage sustainable development, also by promoting the use of bulk and on tap products and developing experimental programmes, such as the so-called “Mangiaplastica” project, aimed at using eco-compactors to contain the production of plastic waste; – the implementation of a series of initiatives with the goal of reforesting metropolitan areas, riparian strips and river state areas, as well as enhancing naturalistic areas for environmental and economic purposes. In addition, it has also been decided to expand the range of environmental information that public administrations, public service concessionaires, and providers of public utility services are required to publish on their institutional websites and then transmit electronically to ISPRA. The latter, in turn, has to process and update a public database relating to all the environmental information collected.

23 See, on these two strategies and their combination, Peel, and Osofsky, in: Voigt (ed.), International Judicial Practice on the Environment: Questions of Legitimacy, 2019, 311.

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Therefore, the promoters of the legal action will have to assess the possible impact that this new and very recent legislation may have on the grounds for the demands they intend to present to the Government. Taking into account the information currently available, we can make some predictions about the likely outcome of the judgment. The proposers in summary require: – that the Italian State recognize the gravity of the situation in which Italy finds itself and acts accordingly; – that human rights violations caused by the impacts of climate change be recognised; – that emission reduction targets be adopted in line with what science demands in order to keep global warming under the prudential threshold of +1.5°C compared to the pre-industrial period. Let us examine these three demands separately. As mentioned above, the first demand is limited to requiring the state to recognise the seriousness of the climate situation, in other words the state of “climate emergency” in which we find ourselves. From a strictly procedural point of view, therefore, it will be an action of “mere verification”, which does not aim to order the State to do something but only seeks a declaration by the Judge recognizing the climate emergency situation. This type of legal action has an advantage for their proponents: it could allow a judicial success without needing either to prove the extent of the environmental or climate damage or to indicate the specific measures that the State should take to deal with it. The most sensitive issue that will arise is that of the admissibility of an action of mere verification in this matter. The Italian legal system, unlike some foreign ones, does not contain any provision from which the admissibility, in general terms, of an action of mere verification can be clearly deduced. However, the action is always admissible for the protection of absolute rights. In Italy, there is a very particular local situation, that of Venice, in which action to combat climate change is especially relevant and concerns the rights not only of the citizens of that city, but of all people, all over the world: Venice is in fact a place of world heritage, which risks sinking (literally) also as a result of climate change. On the merits, the judicial decision granting this request would have important meaning in principle, but reduced practical consequences. The theoretical importance would consist in recognizing that, despite recent progress, the Italian State is not doing enough to face climate change. However, the practical consequences would be limited, since, as mentioned above, a judicial decision of mere verification would essentially consist in a declaration of principle by the Court, without immediate practical consequences. The second request concerns the recognition of human rights violations caused by the impacts of climate change. In this regard, the ECHR’s substantial “environmental” jurisprudence has established states’ responsibility. From a strictly procedural point of view, therefore, it will be an action of “mere verification”, which does not aim to obtain the condemnation of the State to do something, but only seeks a declaration by the Judge, ascertaining the climate emergency situation for the violation of human rights as a result of environmental damage. Article 2 of the European Convention on Human Rights provides, with regard to the right to life, that: 1. Everyone’s right to life shall be protected by law. No one shall be deprived of his life intentionally save in the execution of a sentence of a court following his conviction of a crime for which this penalty is provided by law. In this regard, the following jurisprudential precedents discussed at the European Court of Human Rights should be considered: Guerra and Others v. Italy (1998); Butti

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Oneryildiz v. Turkey (2004); Budayeva and Others v. Russia (2008); Kolyadenko and Others v. Russia (2012); Brincat and Others v. Malta (2014); Smaltini v. Italy (2015). Considering the jurisprudence on the relationship between human rights and the environment as a whole, the possibility that this second request be accepted mainly depends on the level of technical-scientific in-depth study that the promoters of the action will be able to put in place. Will they be able to demonstrate specific human rights violations that have occurred in Italy? This is the decisive question – as yet unanswered – to enable imagining the outcome of this action. The third request asks the Court to order the Italian State to adopt emission reduction targets in line with what science considers necessary to keep global warming beneath the prudential threshold of +1.5°C compared to the pre-industrial period. This will be the most relevant request on a practical level. In a context such as Italy’s, the concrete measures needed to meet this demand should cover the following areas in particular: – Energy production, by accelerating the abandonment of coal in power stations; – Heating, by encouraging the replacement of oil with natural gas and other more modern heat production systems; – Traffic, by discouraging the use of private vehicles and improving public transport and cycling at the same time. It is foreseeable that, in responding to this request, the Italian State will prepare to decline any responsibility for the large-scale effects of its own emissions, on a twofold assumption: on the one hand, explaining that it cannot resolve the question of global warming in the world on its own; on the other hand, offering a constitutional objection related to the separation of powers, which would prevent courts not elected democratically from influencing the policy of the State. These objections are of considerable importance. The promoters of the Italian cause will presumably use two arguments in particular to overcome these objections. The first is the very recent decision of the Dutch Supreme Court in the Urgenda case. As discussed in other contributions to this volume, on 20 December 2019, the highest court of the Netherlands upheld the previous decisions in the Urgenda Climate Case, finding that the Dutch government has obligations to urgently and significantly reduce emissions in line with its human rights obligations. The decision of the Dutch Supreme Court has expressly addressed the two lines of defence mentioned above, which the Italian government will presumably put forward. As for the first aspect, the Dutch Court has effectively explained that individual states cannot “hide” behind the inadequacy of an individual government’s action to achieve climate change objectives. Action by all states is needed, the Court pointed out, and all states are therefore obliged to act. The second element which the Italian State could view as a basis for rejecting requests for condemnation is the principle of the separation of powers, according to which judges should not be able to directly interfere in governments’ political and legislative decisions. The Dutch Supreme Court has argued, in this regard, that in the Netherlands, the principle of the separation of powers is not absolute and that the “rule of law” presupposes that, in the face of potential violations of human rights, political and legislative choices can also become subject to judicial review. There is, however, a second factor which the promoters of the case are likely to use to try to overcome the foreseeable objections of the Italian government. This is the longstanding case law on the precautionary principle. According to this case law, when faced with the threat of irreversible damage to the environment, the State must act, even if the

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contours of the damage are not absolutely certain24. However, again according to established case law, the obligated party can choose the precautionary measures to be adopted, taking into account the principle of proportionality. They must therefore be as little invasive as possible in the specific case25. From this point of view, it is unlikely that the Italian courts can legitimately reach conclusions as specific as those reached by the Dutch Supreme Court. In fact, the Netherland Supreme Court has determined, first, that the positive obligations under Articles 2 and 8 covered climate change risks and, second, that they contained a specific obligation of result to reduce GHG emissions by at least 25 % in 2020, as had been claimed by Urgenda. The conceptual tool that the Supreme Court used to read the target to reduce emissions by 25 % by 2020 into the positive obligations of art 2 and 8 ECHR was the so-called “common ground” method. It is unlikely that the Italian Courts can employ this conceptual tool as well, since they normally prefer to avoid interfering so directly in governmental and political decisions. It is more likely, in my opinion, that the Courts can generally order the government to do everything in its power, in compliance with constitutional principles and their necessary balance, to improve the country’s environmental policy with respect to climate change. In any case, the lawsuit that will be filed (probably by 2020) will greatly embarrass the 38 Italian government in office. In fact, unlike some past governments, the current government has always publicly declared its utmost commitment to environmental policies, and to action against climate change in particular. It is therefore presumable that the government, after receiving the summons, decides to try to negotiate with the proposers of the judgment. But it is likely that the proposers will request at least the same decision as in the Netherlands: that is, that the Italian State be ordered to reduce greenhouse gas emissions in a very significant way. However, the distance between this foreseeable request and the current Italian situation is considerable. Hence the difficulty of an out-of-court settlement, and the consequent probable embarrassment of the government in having to take legal action to demand the rejection of the environmental groups’ requests.

IV. Local court cases that are relevant to climate change litigation in Italy Before the national case (‘last judgment’) was announced, two recent decisions of the 39 Regional Administrative Court (TAR) of Lombardy and one decision of the Regional 24 See, on the precautionary principle: ECJ Judgment of 28 March 2019, Verlezza and others (C-487/17 to C-489/17) ECLI:EU:C:2019:270; ECJ Judgment of 7 November 2019, UNESA (C-80/18 to C-83/18) ECLI:EU:C:2019:934; Italian Constitutional Court, Decision no. 85 of 9 May 2013; High Administrative Court, Decisions no. 3767 of 31 August 2016, no 1392 of 27 March 2017, no. 826 of 8 February 2018 and no. 3109 of 24 May 2018. 25 See, on the proportionality principle: ECJ Judgment of 13 November 1990, The Queen v Minister of Agriculture, Fisheries and Food and Secretary of State for Health, ex parte: Fedesa and others (Case C-331/ 88) ECLI:EU:C:1990:391; ECJ Judgment of 22 November 2001, Netherlands/Council (C-110/97, ECR 2001 p. I-8763) ECLI:EU:C:2001:620; ECJ Judgment of 5 February 2004, Commission/France (C-24/00, ECR 2004 p. I-1277) ECLI:EU:C:2004:70; ECJ Judgment of 2 December 2004, Commission/Netherlands (C-41/ 02, ECR 2004 p. I-11375) ECLI:EU:C:2004:762; ECJ Judgment of 1 April 2004, Bellio F.lli (C-286/02, ECR 2004 p. I-3465) ECLI:EU:C:2004:212; ECJ Judgment of 12 January 2006, Agrarproduktion Staebelow (C504/04, ECR 2006 p. I-679) ECLI:EU:C:2006:30; ECJ Judgment of 19 December 2012, Commission/Italy (C-68/11) ECLI:EU:C:2012:815; ECJ Judgment of 10 September 2015, Nannoka Vulcanus Industries (C81/14) ECLI:EU:C:2015:575; Italian Constitutional Court, Decisions no. 85 of 9 May 2013 and no. 58 of 23 March 2018; High Administrative Court, Decisions no. 5443 of 23 December 2016 and no. 1299 of 2 March 2018.

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Administrative Court (TAR) of Lazio dealt with similar cases. While of course these apply only to the relevant region (Lombardy or Lazio), it should be noted that such regions are among the most important ones in Italy from an economic and productive point of view. 40 The first case related to Lombardy was decided in 201726. Some environmental associations had appealed to the Lombardy Regional Administrative Court, complaining about the region’s inertia in carrying out the necessary update of the Regional Plan of Interventions for Air Quality.27 This inaction continued even after a specific warning from the claimants. In the meantime, the region acted by approving the Plan with Regional Council Resolution no. 6438 of 3 April 2017. Therefore, the Regional Administrative Court ruled the appeal inadmissible. However, given that the region did not take action until after the appeal had been lodged, the Court of First Instance ordered it to pay the costs of the proceedings in favour of the claimants. 41 The second Lombardy case was decided in 2019, again by the Lombardy Regional Administrative Court28, and it was an evolution of the first. The claimants in this case complained of a series of shortcomings in successive Regional Plans for Air Quality and, in particular, in one approved by Resolution of the Regional Council no. 449 of 2 August 2018. The claimants’ two main complaints concerned the lack of a Strategic Environmental Assessment prior to the Plan’s approval and the underestimation of the health impact of emissions. With regard to the first, the Regional Administrative Court denied that the Strategic Environmental Assessment was necessary, as the Plan did not have a potentially negative impact on air quality. Concerning the second complaint, the TAR did not consider that the claimants had adequately demonstrated, from a scientific point of view, an underestimation of the health risks. Therefore, the TAR dismissed the appeal. It is important to note, however, that the rejection decision is based on specific reasons of merit but does not dispute the legitimacy of the applicant associations to challenge the adequacy of the Air Quality Plans. On the contrary, the Regional Administrative Court has long argued in favour of this entitlement. From this point of view, therefore, the decision could provide an important precedent for future cases of climate litigation, both at the national and local levels. 42 The Lazio case goes back to 201029 and concerns a company’s request that the Ministry of the Environment annul a resolution adopted by an internal committee of the Ministry on emission trading. In particular, the company contested that by means of a mere administrative act such as the contested decision, it was possible to amend, not simply clarify, the content of a primary provision (Legislative Decree No 216/2006, by which the Government implemented, by parliamentary delegation, Directive 2003/87/ EC). Such a provision had extended the scope of application of the National Plan for the Allocation of CO2 quotas for the period 2008–2012 also to the applicant’s activity, namely the production of carbon black. The Lazio Regional Administrative Court, called upon to rule on the action, noted that the contested measure was intended to comply with the international and Community obligations assumed by Italy with regard to the emission of greenhouse gases. Furthermore, it stated that Directive 2003/87/EC in particular provided that the Member States may allocate CO2 emission quotas to 26

Lombardy Regional Administrative Court no. 1088 of 12 May 2017. This was the Plan approved by Resolution of the Regional Council no. 593 of 6 September 2013. The region adopted this resolution after the Lombardy Regional Administrative Court had made it compulsory, on the initiative of the same claimants (Lombardy Regional Administrative Court no. 2220 of 4 September 2012). 28 Lombardy Regional Administrative Court no. 1661 of 18 July 2019. 29 Lazio Regional Administrative Court no. 4090 of 16 March 2010. 27

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individual installations, including those of the applicant. The College also observed that the European Decisions are directly applicable in each Member State and binding on both citizens and companies as well as on the national authorities, which are required to implement them in a timely manner. Consequently, according to the Regional Administrative Court, the Committee set up at the Ministry of the Environment had duly implemented the decision of 15 July 2007, supplementing the National Plan by means of the contested resolution, which, therefore, could not be considered unlawful.

V. Conclusion As we have seen, the only precedents of climate litigation in Italy have local relevance. 43 However, a high-profile case involving the national government is in the preliminary phase. The possibility that the Italian State will be convicted in this procedure depends on the incisiveness of the measures to combat climate change that may be adopted before the end of the procedure and on the depth of the technical and scientific expertise that the parties will bring to the case.

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Q. Climate change litigation in France Bibliography: Brunengo-Basso, Journal des sociétés, May 2011, 55; Albert, Causalité administrative et causalité civile, Revue Lamy Droit civil, n° 40, 1/07/2007; Baldon, L’Affaire du siècle: une action juridique inédite pour contraindre l’État à lutter efficacement contre le changement climatique, Énergie – Environnement – Infrastructures n° 5, May 2019, dossier 20; Canali, in: Cournil/Varison (dir.), Les procès climatiques, entre le national et l’international, 2018; Cossart/Sohm, in: Cherief/Ravillon (dir.), Entreprise et environnement, 2018; Cournil et Varison (ed.), Les procès climatiques: entre le national et l’international, Pedone, Paris, 2018; Cournil, Le Dylio, Mougeolle, L’affaire du siècle “: entre continuité et innovations juridiques, AJDA 2019, 1864; Cuzacq, Revue sociétés 2015, 707; Dezeuze, in: Trébulle/Uzan (eds.), Responsabilité sociale des entreprises, Regards croisés Droit et Gestion; Huglo, Procès climatique en France: la grande attente. Les procédures engagées par la commune de Grande-Synthe et son maire, AJDA 2019, 1861; Huglo, Le contentieux cimatique: une révolution judiciaire mondiale, 2018; Lafforgue, in: Cournil/Varison (dir.), Les procès climatiques, entre le national et l’international, 2018; Lambert-Faivre/Porchy-Simon, Droit du damage corporel – Systèmes de compensation, 2009; Martin, Revue sociétés, 2011, 75; Mercier, in: Martin-Chenut/de Quenaudon (eds.), La RSE saisie par le droit, perspectives interne et internationale, 2015; Stirn & Aguila, Droit public français et européen, 2018; Torre-Schaub, Les contentieux climatiques, quelle efficacité en France? Analyse des leviers et difficultés, Énergie – Environnement – Infrastructures n° 5, May 2019, dossier 17; Torre-Schaub (dir.), Les dynamiques du contentieux climatique, Usages et mobilisations du droit pour la cause climatique, final research report, Dec. 2019.

Contents I. Introduction ..................................................................................................... 1 II. Climate change litigation in public law ..................................................... 5 1. Available remedies...................................................................................... 7 2. Injury ............................................................................................................. 11 a) Standing................................................................................................... 12 b) Damage.................................................................................................... 18 3. Illegal act or conduct ................................................................................. 21 a) Substantive fault .................................................................................... 23 b) Procedural fault ..................................................................................... 34 4. The causal link between the damage and the misconduct ............... 37 III. Climate change litigation in private law.................................................... 40 1. Making French companies eco-friendly through business law........ 49 a) Reporting................................................................................................. 50 aa) Corporate law reporting ............................................................... 51 (i) Legal sources ............................................................................ 52 (ii) Scope of application................................................................ 55 (iii) Content...................................................................................... 59 (iv) External audit........................................................................... 61 (v) Law enforcement tools/sanctions ........................................ 62 (vi) Civil remedies .......................................................................... 63 (vii) Administrative measures and sanctions............................. 64 (viii) Criminal law sanctions .......................................................... 65 bb) Financial markets law reporting................................................. 66 b) Adoption of environmentally responsible measures..................... 74 aa) Articles 1833 and 1835 of the French civil law....................... 75 bb) Duty of vigilance of parent and instructing companies........ 81 2. Conditions and limits to the engagement of climate change civil liability: analysis of the difficulties and solutions to overcome them .. 86 a) Conditions and limits to engage climate change civil liability of companies ............................................................................................... 87 aa) French tort law and procedural law .......................................... 88 bb) Application to climate change litigation................................... 96 b) Solutions to facilitate climate change litigation.............................. 100

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I. Introduction Since the UN Climate Change Conference in Paris in 2015, protecting the environ- 1 ment and tackling climate change have become major issues in France, as illustrated by considerable media coverage and public support. Several new regulations have been enacted, setting ambitious objectives to be reached by 2030 or 2050.1 The Law n° 2019‐ 1147 of 8 November 2019 on energy and the climate (“loi relative à l’énergie et au climat”) is France’s most recent framework document on climate and energy matters. It notably enshrines into law the objective of carbon neutrality by 2050 and sets a number of quantified objectives for the energy sector2. However, one cannot help but wonder whether France is committed to implementing 2 its declared ambitions. First, the level of national greenhouse gas emissions has started rising again since 2015, after an almost uninterrupted decline since the end of the 1990s, and recent reports have highlighted the country’s inability to achieve the objectives it sets for itself3. Secondly, the political crisis triggered by the opposition of the “Yellow Vest movement” to the carbon tax increase has led governmental discourses to emphasize the protesters’ objective of making ends meet at “the end of the month” rather than that of avoiding “the end of the world”. Acknowledging the urgent need to raise the Government’s climate awareness, a criminal court in Lyon ruled in 2019 that the climate activists who had removed portraits of the French President, Emmanuel Macron, from a town hall should be acquitted4. This may seem like a favourable context for developing strategic litigation targeted at 3 raising climate awareness among the population and decision-makers. Yet the number of climate cases filed in French courts remains limited. Furthermore, most cases are brought against the State, be it before administrative courts or the Constitutional Council – the official interpreater of the French Constitution. These two elements point to a contradiction. On the one hand, French non-state actors (NGOs, individuals, but also cities) seem to dispute the State’s monopoly on making climate law and express their intention of greater participation in climate law-making. On the other hand, these actors seem to expect their empowerment to derive from some form of state intervention. However, as climate litigants also begin to target some transnational companies, such a contradiction could fade away, meaning that the focal point of climate law may 1 Regarding the actions of the French legislature intended to benefit the environment, the following two laws are worth mentioning: Law n° 2010-788 of 12 July 2010 on the national commitment to the environment (“portant engagement national pour l’environnement”), known as the “Grenelle II Law”, establishes a new form of governance, strongly influenced by the concern for environmental protection. Five years later, the National Assembly under President François Hollande passed Law n° 2015-992 of 17 August 2015 on the energy transition for green growth (“loi relative à la transition énergétique pour la croissance verte”). This law was supposed to enable France to make a more effective contribution to combating climate change and protecting the environment, as well as strengthening its energy independence, while allowing its businesses and citizens to access to energy at competitive costs. At the heart of the law was the acceleration of the energy transition and green growth for increased economic activity and employment. Law n° 2019-1147 of 8 November 2019 on energy and climate (“loi relative à l’énergie et au climat”) is France’s most recent framework document on climate and energy matters. 2 Article L. 100-4, I of the Energy Code. 3 Cf for instance High Council for the Climate, Rapport annuel, 26 June 2019 (available at: www. hautconseilclimat.fr/rapport-2019/). 4 TGI Lyon, 16/02/2019, n° 19168000015 (however, the Court of Appeal has reversed the ruling, sentencing the defendants to a fine of 500 euros: cf “Des “décrocheurs” de portraits de Macron condamnés en appel”, LeMonde, 14/01/2020). Hundreds of portraits were thus removed in 2019 as part of a climate movement called “Take Down Macron”, leading to very different rulings, from conviction of theft to acquittal.

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in fact shift from governments backed by experts to judges and civil society. Because climate case law is still in its infancy, it is as yet too early to determine whether French judges will pursue this path. 4 Rather than listing and summing up cases, this article therefore attempts to analyze available requests in light of hurdles and potentialities under French positive law. The next part of this paper focuses on climate litigation in public law (II.), while the last part examines its development in private law (III.).5

II. Climate change litigation in public law Climate change litigation in French public law has developed as the result of suits filed by non-profits or local communities. By means of these litigations, applicants have sought to compel the government to enact more robust and ambitious policies that aim to reduce greenhouse gas emissions and that better position communities to adapt to climate change. The development of climate change litigation in French public law is also the result of actions brought by corporations, in an effort to avoid aggravating the environmental regulatory burden. These applicants all direct their legal actions against the French state, addressing climate change mitigation and adaptation by attacking the government’s actions or inaction, as the case may be. 6 As a result of climate change litigations, numerous applicants have submitted state laws and policies to the judicial review of administrative courts or the Constitutional Council. Applicants pursue two types of causes of action in their lawsuits. A first cause of action challenges the lawfulness of a legislative act or potential state misconduct, which may result from failure to enact a legislative act. The second cause of action is an action for state liability, on the grounds that the state has caused damage as a result of enacting a law or by failing to enact a law. Depending on the cause of action, the Courts might grant different types of remedies (1.). However, in all the cases, the issues brought before the Courts appear to be relatively similar: all cases involve determining the lawfulness of an act or of the conduct of the state (2.), demonstrating damage or at the very least standing (3.), and proving a causal connection between state conduct and the damage at issue (4.). 5

1. Available remedies 7

Traditionally, French public law differentiated stringently between objective litigation and subjective litigation. Objective litigation challenges the lawfulness of a law or a regulation. The classical remedy in an objective litigation is the repeal of the challenged act. By contrast, subjective litigation is a cause of action seeking recognition of the public authority’s liability in causing an injury to the applicant. In the context of subjective litigation, the law grants the administrative judge “all judicial competence, as not only [can] he repeal an act, but also amend it, and even order the State to compensate the applicants.”6 However, the line drawn between these two types of litigations has tended to blur over the years, as the range of available remedies in objective litigation cases has expanded to encompass more than a simple repeal of the challenged act. There have been more and more administrative summary proceedings that seek to suspend the implementation of an allegedly unlawful law. Moreover, since 1995, administrative judges are allowed to issue injunctions in cases of administrative acts taken ultra vires 5 The first part of this paper was written by Aude-Solveig Epstein (update: January 2020) and the second by Katrin Deckert. 6 Stirn/Aguila, Droit public français et européen, 2018, 714.

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(“recours pour excès de pouvoir”). Injunctive remedies to actions taken by the government ultra vires include injunctions to apply a particular measure7 or injunctions to review the applicants’ request within a set timeframe8. The expansion of the range of available remedies has thus resulted in making the repeal of an act and injunctive reliefs available both in subjective and in objective litigations. Only the remedy in the form of awarding damages remains specific to an action for liability. Over the past few years, both objective and subjective climate litigations have been 8 launched in France. Objective litigation has developed in large part due to the decision of the City of Grande-Synthe and its Mayor, in 2019, to challenge several State acts or failures to act, on the grounds that they had been taken ultra vires. The first action petitioned the judge to order the State to “take all useful measures to decrease levels of greenhouse gases emitted on the national territory, so as to comply with national and international agreements ratified by France […]; enact legal and regulatory provisions to make limiting climate change mandatory, and ban all measures likely to increase greenhouse gases emissions […]; [and enact] immediate measures to adapt France to climate change.” The so-called “Affaire du Siècle” (“The Case of the Century”), where four non-profits 9 sued the French state for liability before the Administrative Tribunal of Paris in March 20199, offers a prime example in subjective litigation. This case illustrates two interesting features of climate litigation in France. First, it is emblematic of the strategic nature of this strand of litigation. Indeed, the applicants’ strategy reaches far beyond the courthouse; it includes gaining extensive media coverage and strong support from civil society. “The initiation of the action was thus accompanied by a press conference, the launch of a dedicated website, the dissemination on social networks of a video involving “influencers” and other celebrities and an online petition to support the legal action. This modus operandi has proven particularly effective, since the petition received unprecedented support with more than a million signatures in two days and more than 2 million in a few weeks. Thus, even before constituting a real legal action, the Affair of the Century was transformed into a mobilization support and powerful political lever”.10 Secondly, the case reveals that even if applicants formally seek recognition of state liability, their actual goal may be attaining injunctive reliefs to remedy the lack of political will in addressing climate change. Indeed, applicants in the Affaire du Siècle are not seeking monetary compensation beyond a symbolic sum of one Euro per damage. Their primary objective is that the Court should order the State to “take all necessary measures to decrease greenhouse gases emissions – proportionally to global emissions, while taking into account the responsibility of developed countries in emitting such gases – to a level that complies with the objective of limiting the temperature rise under 1.5 ºC compared to temperatures recorded in pre-industrial times […]”; and should “at the very least, take all measures allowing France to achieve its objectives in terms of limiting 7

Code of Administrative Justice, art. L. 911-1. Code of Administrative Justice, art. L. 911-2. 9 Cf Cournil/Le Dylio/Mougeolle, L’affaire du siècle: entre continuité et innovations juridiques, AJDA 2019, 1864. 10 Baldon, L’Affaire du siècle: une action juridique inédite pour contraindre l’État à lutter efficacement contre le changement climatique, Énergie – Environnement – Infrastructures n° 5, May 2019, dossier 20 (concluding that “whatever the final outcome of the Affair of the Century may be, it has already enabled the claiming NGOs to gain a first victory by successfully placing climate change at the heart of public debates.”). 8

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greenhouse gases emissions, developing of renewable energies, and increasing energy efficiency”; “take all necessary measures to adapt the national territory to the effects caused by climate change”; and “ take all necessary measures to protect the lives and health of citizens against the risks posed by climate change.” 10 It is noteworthy that in both the Grande-Synthe and the Affaire du Siècle cases, the claims for injunctions have been drafted in general terms. By using such vague terms, applicants seem to be anticipating the administrative courts’ potential reluctance to encroach on the state’s legislative or executive power. The use of such general wording could also be due to the difficulty of precisely describing the State’s wrongdoings and clearly identifying the injuries that result from such wrongdoings.

2. Injury 11

The conditions for successful objective litigation seem less demanding, since applicants only have to show standing (a), while subjective liability litigation requires applicants to show also that they have suffered a damage meeting several characteristics (b).

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a) Standing. French law does not recognize actio popularis. An applicant therefore has to show standing even in an objective litigation, which seeks to restore the legal order by challenging the lawfulness of an act (a law or a regulation). Consequently, only the persons who are likely to be affected by the challenged act are allowed to put in a request for a posteriori constitutional review before the Constitutional Council. Such was the case when an oil company filed a request that the Constitutional Council review a regulation which had increased a tax on liquid hydrocarbons extraction activities.11 In the same vein, another oil company recently claimed that the incentive tax on biofuels should also benefit fuels produced from palm oil, at least if the oil was produced under special conditions, so as to avoid the risk of increased indirect greenhouse gas emissions.12 However, in both cases the Council ruled against the claimants and upheld the regulations. Similarly, an applicant seeking the suspension or repeal of a regulation must demonstrate that he is affected in a personal and individual way. An action by an applicant arguing standing on the grounds of being a consumer or a citizen seeking to restore lawfulness would thus be rejected on the basis that the claim is too general.13 Given the complex and large-scale effects of climate change, the admissibility of an action filed by a natural person challenging a regulation for lack of effectiveness in tackling climate change is likely to fail for lack of standing. The chances that such an action is successful are further decreased by the fact that French Courts have consistently ruled that the “right to live in an ecologically balanced environment” and the “duty to contribute to environmental protection” provided in articles 1 and 2 of the 2004 constitutional Charter for the Environment do not suffice to grant standing in an action pursuing the suspension or repeal of a regulation.14 Indeed, granting standing on the grounds of these rights and duties to which every person is entitled would be equivalent to recognizing an actio popularis. However, showing standing might be easier for legal persons, since for them, standing is substantiated by the existence of a link between the litigated act and the legal person’s mission statement – provided such a statement is precise enough.15

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Cons. const., Décision n° 2019-771 QPC, 29/03/2019, Vermilion REP. Cons. const., Décision n° 2019-808 QPC, 11/10/2019, Total raffinage France. 13 CE, 6/10/1965, Marcy, req. n° 61217, Lebon 493. 14 Cf TA Amiens, Ord. 8/12/2005, n° 0503011; CE 3/08/2011, Mme Buguet et a., req. n° 330566, Lebon. 15 Cf Article L. 142-1 of the Environmental Code. 12

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These issues of standing explain why most of the climate litigation cases in France are 17 pursued by legal persons. These legal persons are mostly non-profits, but some are also companies and public local administrations, such as the city of Grande-Synthe, which is located in a region at high risk of environmental degradation.16 b) Damage. Applicants in a subjective litigation suing the State for liability must 18 demonstrate both standing as a procedural condition and the existence of an actual and certain damage as a substantive condition. French law has defined the range of damages eligible for compensation rather 19 broadly. First, French law tends to consider all damage to a legitimate, personal interest as eligible for compensation. Secondly, the compensation of damage to the environment as such has been codified into the Civil Code in 2016, in terms based on previous case law.17 Thirdly, French case law allows for an expansive interpretation of what constitutes moral damage for legal persons. As a result, judges have consistently found that environmental harm, or even the risk of causing harm to the environment, could result in moral damage for environmental protection organizations. Finally, future damages, including risks of future damages, are deemed reparable, provided the applicant proves that these damages or risks of future damages are certain enough. The four non-profit organizations that comprise the applicants in the Affaire du 20 Siècle case are making use of this liberal interpretation of damages eligible for compensation under French law, by requesting that the judge issue measures to mitigate risks of damages that are not yet proven certain. The applicants are also requesting that the State repair moral damages caused to the non-profit organization’s mission as well as the damages caused to the environment itself. Should the judge accept this latter request, it would be the first time that an administrative court in France would recognize the existence of environmental damage in law. However, one may question whether the impacts of climate change actually fit the definition of environmental damages as provided in article 1247 of the Civil Code.18 Furthermore, it is arguable that the applicants in the Affaire du Siècle have so far failed to prove the existence and the scope of the alleged damages in support of their case, mostly insofar as such damages will occur in the future and are thus difficult to assess.

3. Illegal act or conduct In the past, French judges have already found the State liable for failure to protect 21 public health and the environment.19 Specifically, recent judgments condemn the government’s failure to properly protect natural persons from personal injury caused by air pollution.20 Applicants in climate change litigation refer to such case law, all the more so because science has long established the causal connection between air pollution and climate change. According to claimants, the French governmental policies lack ambition, and would therefore be unlawful. However, courts might be reluctant to follow such reasoning, on the grounds that lack of political will and failure to undertake 16 There is one ongoing case in France filed by a physical person: the Grande-Synthe city Mayor. However, the Mayor filed the suit with an appeal before the European Court of Human Rights in mind. The city as a legal person is also an applicant in the case. Cf Huglo, Procès climatique en France: la grande attente. Les procédures engagées par la commune de Grande-Synthe et son maire, AJDA 2019, 1861. 17 Cf Articles 1246 et seq. of the Civil Code. 18 Torre-Schaub, Les contentieux climatiques, quelle efficacité en France? Analyse des leviers et difficultés, Énergie – Environnement – Infrastructures n° 5, mai 2019, dossier 17. 19 Cf TA Lyon 19/10/1993, n° 89-430-47; CAA Nantes, 22/03/2013, n° 12NT00342; TA Rennes, 9/02/ 2018, n° 1500372 et a.; CA Toulouse, 6/03/2018, n° 1501887 et a. 20 Cf TA Montreuil, 25/06/2019, n° 1802202; TA Paris, 4/07/2019, n° 1709333/4-3 et a.

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regulation are two different things. The failure to enact proper regulation presupposes the existence of a clear duty imposed on the administration and a breach of such a duty. For example, applicants were successful in a case brought against the State for failure to comply with the European Regulations on the Monitoring of Air Quality and the Reduction of National Emissions of Certain Atmospheric Pollutants21 because EU law imposed a specific obligation on Member States. However, the legal force of climate change law remains to be determined, as long as the Government does not transpose the Paris Agreement objectives into precise legal obligations binding on the State. 22 In such a context, it might be easier for applicants in a climate change litigation case to prove that public authorities were in breach of procedural rules required under the public consultation process (b), as opposed to demonstrating that they breached a substantive duty to address climate change and its effects (a). a) Substantive fault. French law allows public authorities to adopt stringent climate change policies. In 2019, the Council of State (France’s higher administrative court) ruled that a decrease in greenhouse gases in order to mitigate global warming constituted a general interest objective that could justify infringements on the right to property22. Likewise, in 2018, the Council of State found a law valid that will progressively end research and exploitation of hydrocarbons on the French territory. In its decision, the Council of State suggested that “the general interest objective to limit global warming and the necessity for France to meet its commitments under the Paris Agreement” could likely justify infringements of the freedom to conduct business, even though such an infringement was not established in that specific case.23 More recently, the Constitutional Council has also reeled that the predection of the environment was a constitutional objective that could trump freedom to conduct a business, even in the case where the law sought to reduce environmental damage ahead.24 24 Although French courts have allowed public authorities to adopt forceful climate change policies, they have not yet interpreted the law in the sense that it would impose a duty on public authorities to show ambition in enacting and implementing climate change policies. Even though the Environmental Code states that “the fight against the intensification of the greenhouse effect and the prevention of risks related to global warming are national priorities,” administrative case law views such a provision only as a policy objective, and thus not as one which imposes an obligation on the State.25 25 To circumvent such a restrictive interpretation, several proposals for constitutional amendments to establish the fight against climate change as a national priority have emerged in the past few years in France. However, as Congress keeps delaying the revision of the Constitution, NGOs have turned to the courts as a way of bypassing the longer legislative process, in order to achieve constitutional recognition of the fight against climate change as an effective priority26. 26 The Affaire du Siècle case exemplifies such an attempt, and in doing so, accurately portrays the shortcomings of the French legal framework in addressing climate change. Applicants also point to a range of more general public policy flaws in France, such as lack of monitoring and assessment. However, the case still falls short of identifying 23

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Cf CE 12/07/2017, n° 394254. CE, 18/12/2019, nº 421004. 23 CE, 27/06/2018, n° 419316. 24 Cons. const., Decision nº 2019-823 OPC, 31/01/20, union des Industries de la protection des plantes. 25 CAA Nancy, 21/06/2007, n° 06NC00102. 26 Applicants in a case can also undertake lobbying activities to advocate for the amendment of the Constitution, as is the case with the Association “Notre Affaire à tous”. 22

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specific obligations that the State may have overlooked when enacting low-ambition climate policy measures. International law and comparative law provisions feature prominently in the Affaire 27 du Siècle‘s application. The application frequently mentions the Paris Agreement. Yet the Paris Agreement notoriously signalled a “turn towards voluntary commitments and soft law.”27 The applicants also refer to the famous Urgenda case, but surprisingly, they do not mention on what legal basis the Dutch judges ruled in favour of imposing a duty on the Dutch State to reduce greenhouse gases by 25 % instead of simply 17 %. As a reminder, the La Haye court ruled the following: “51. The State has known about the reduction target of 25‐40 % for a long time. The IPCC report which states that such a reduction by end-2020 is needed to achieve the 2ºC target (AR4) dates back to 2007. Since that time, virtually all COPs (in Bali, Cancun, Durban, Doha and Warsaw) have referred to this 25‐40 % standard and Annex I countries have been urged to align their reduction targets accordingly. This may not have established a legal standard with a direct effect, but the Court believes that it confirms the fact that at least a 25‐40 % reduction of CO2 emissions as of 2020 is required to prevent dangerous climate change.”28 Regrettably, French applicants do not refer to this part of the ruling, which could have proven useful to identifying France’s share in the global effort to reduce greenhouse gases emissions, while limiting the judiciary branch’s encroachment on the legislative or executive branch.29 As for national law, applicants in the Affaire du Siècle refer to the National LowCarbon Strategy (NLCS). The Affaire thus grants the opportunity to have a court ruling that determines the binding or non-binding character of the NLCS. Regardless of how the court might rule, because the NLCS is a regulation (and not a law), it cannot be binding for the legislature but only for government agencies. In any case, “it may be too early to criticize the State for not achieving [the SNCB’s objectives], because the NLCS’s objectives are not due to be assessed until 2020, 2030, and 2050 respectively.”30 Additionally, the applicants claim that the French government has failed to achieve the “national indicative targets,” which it adopted in compliance with article 3 of the directive of 25 October 2012 on energy efficiency. However, such objectives are expressly “indicative,” and thus not legally binding. To circumvent the challenge of identifying specific standards that the State may have breached, the Affaire applicants support their case with general claims rooted in constitutional law and international human rights law. For example, they refer to a 2011 decision by the Constitutional Council, which ruled, on the basis of the Charter for the Environment, that “all have a duty of care to prevent damage caused to the 27 Torre-Schaub, Les contentieux climatiques, quelle efficacité en France? Analyse des leviers et difficultés, Énergie – Environnement – Infrastructures n° 5, May 2019, dossier 17. 28 The Hague Court of Appeal, 9/10/2018, C/09/00456689, Urgenda Foundation v. The Netherlands. While upholding this ruling in its 20 December 2019 decision, the Supreme Court stressed that “the Court of Appeal limited the order given to the State to the lower limit (25 %) of the internationally agreed, minimum necessary reduction target for 2020 of 25–40 %. The order given leaves it up to the State to determine with which concrete measures it will comply with that order.” 29 Similarly, it would have been strategic to refer to the French government’s public statements over the last few years, where it consistently championed against climate change. Applicants could have argued that these statements, as well as France’s consistent position in favor of climate change policy at the global level, were tantamount to a unilateral voluntary commitment. 30 Torre-Schaub, Les contentieux climatiques, quelle efficacité en France? Analyse des leviers et difficultés, op. cit.

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environment as a result of their activities.”31 Based on that ruling, applicants argue that the Court should order the “State to adopt all necessary measures to manage risks of causing environmental damages and, where appropriate, to effectively protect the environment and public health against climate change.” Yet nothing in the Constitutional Court decision defines the duty of care deduced from the Charter for the Environment as a duty to achieve a fixed result. On the contrary, the Constitutional Council considers that “this duty of care establishes (…) an obligation of means and does not guarantee against any harm to the environment.”32 32 The City of Grande-Synthe is following a different – and perhaps complementary – strategy to overcome the challenge of defining what specific climate change policy standards the French government might have breached. In the second case the City and its mayor brought against the French State in 2019, they request the repeal of the second National Adaptation Plan for Climate Change for the period 2018‐2022, launched in December 2018. Applicants argue that the Plan has no legal standing, based on its “lack of quantifiable measures and legal or financial means to ensure an actual adaptation to climate change.”33 Rather than challenging the government’s decisions regarding the articulation of economic development with environmental and public health protection, applicants thus ask the judge to declare a minimum threshold of protection binding on the State.34 If successful, this case could set up an obligation on the State, so that it must commit to specific and legally binding measures. Such a duty could in turn substantiate the State’s misconduct if it were to breach such measures. 33 The idea of a minimum threshold of protection against climate change impacts is already gaining ground, as illustrated by the Constitutional Council decision of 20 December 201935. The Council has ruled that the objectives that orient the government’s conduct shall not contravene the right to live in a healthy and ecologically balanced environment enshrined in Article 1 of the Charter for the Environment. For fear of encroaching on the State’s legislative power, the Council considers that it “cannot rule on the appropriateness of the objectives that the legislator assigns to the action of the State, unless these are not manifestly inadequate for the implementation of this constitutional requirement”. Congress thus holds a great amount of power in determining whether legislation is constitutional. Nevertheless, this ruling still represents progress, since it agrees to review legislative decisions regarding the means with which the Legislature intends to ensure the right for all to live in a healthy environment36. b) Procedural fault. As an alternative or as a complement to suing the State for having violated substantive duties, applicants could consider a more classical approach, which challenges a legal act undertaken by public authorities on the grounds that the public was insufficiently informed and involved in its enactment. French law is particularly open to such litigation strategies, for at least two reasons. 35 First, article 7 of the constitutional Charter for the Environment states that “[s]ubject to the limits and conditions specified in the law, each person has the right to access information related to the environment held by public authorities and to participate in 34

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Cons. constit., Décision n° 2011–116 QPC, 8/04/2011, M. Michel Z. et autres. Official commentary of the decision by the Constitutional Council, available here: https://www. conseil-constitutionnel.fr/sites/default/files/as/root/bank_mm/decisions/2011116qpc/ccc_116qpc.pdf. 33 Huglo, AJDA 2019, p. 1861, op. cit. 34 Following the same logic as Dutch judges in the Urgenda case (Petrinko, De la décision d’Urgenda aux perspectives d’un nouveau contentieux climatique, in Cournil et Varison (ed.), Les procès climatiques: entre le national et l’international, Pedone, Paris, 2018, p. 113 et s., p. 121). 35 Cons. constit., Décision n° 2019-794 DC, 20/12/2019, Loi d’orientation des mobilités, § 36. 36 Cf Cons. constit., Décision n° 2012-282 QPC, 23/11/2012, Association France Nature Environnement et autres, § 8. 32

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the formulation of public decisions affecting the environment.” On the basis of this provision, the Constitutional Council in 2004 notably struck down legislative provisions on the Regional plan for climate, air and energy because of their insufficient precision regarding the means of public information and participation.37 Second, the environmental impact assessment shall include a “description of the 36 notable effects that the project is likely to have on the environment, including […] the effects of the project on the climate and the project’s vulnerability to climate change.”38 However, there is a debate on the precise scope of greenhouse gas emissions to be assessed in the impact assessment. In a 2018 case, the Administrative Tribunal of CergyPontoise repealed the permit for the creation of an urban development zone that included the construction of housing, businesses, and public transportation.39 The court ruled that the environmental impact assessment’s scope was too narrow: it included emissions directly generated by the project, but it did not take into account indirect emissions stemming from the creation of additional energy sources or from the increase in visitors due to the attractiveness of the urban area. This ruling thus endorsed a global vision of the project, taking into account the emissions of greenhouse gases over a complete lifecycle analysis.40 However, the decision was subsequently reversed on appeal, on the grounds that only direct emissions should be reported in the assessment (in other words, “scope 1 emissions” in the parlance of climate reporting).41 Implicit in the Court of Appeal’s decision is the issue of accountability and liability for these emissions, which naturally leads to the causal connection between the damage and the misconduct.

4. The causal link between the damage and the misconduct Proving causal connection is traditionally viewed as the Achilles’ heel of climate 37 change litigation. Applicants have typically had a difficult time demonstrating that the damage they claimed would be a direct consequence of the aggravation of climate change caused by the defendant’s misconduct.42 From the point of view of French law, the hurdle appears less as a technical problem than as a matter of judicial policy. Indeed, French law does not provide any clear or consensual definition of causal connection. Causal connection is frequently described as an adjustment variable, as a practical, judicial policy tool to determine standing or liability43. This category is all the more 37 Cons. const., Décision n° 2014-395 QPC, 7/05/2014, Fédération environnement durable et autres, § 6–11. 38 Article R. 122-5 of the Environmental Code. 39 TA Cergy, 6/03/2018, n° 1610910 et 1702621, Collectif pour le Triangle de Gonesse et a.: JurisData n ° 2018-003019. But the Administrative Tribunal of Cergy-Pontoise has not uniformly ruled in favor of an expansive interpretation of the scope of greenhouse gas emissions in environmental impact assessments. In February 2019, the court ruled on an application filed by seven environmental NGOs against the State in an emergency procedure, which sought the immediate suspension of Total’s offshore drilling permit for the extraction of oil in French Guiana. Although not explicitly stated in the ruling, the applicants seem to have argued that the environmental impact assessment had failed to include the indirect emissions that would stem from the exploitation of the oil that may be discovered and from its subsequent uses. The court rejected the appeal on the basis that applicants had not demonstrated the urgent nature of their action. 40 Other foreign jurisdictions have already imposed a duty to take into account indirect (“scope 3”) greenhouse gas emissions in the environmental impact assessment. Cf for instance in Australia: Gray v. Minister for Planning and Ors, 2006. 41 CA Versailles, 11/07/2019, n° 18VE01634 et a. 42 Burger, Expertise scientifique et lien de causalité dans le cadre du contentieux climatique: le point de vue de la doctrine américaine, Énergie – Environnement – Infrastructures n° 8–9, Août 2018, dossier 33. 43 The requirement that applicants must prove causal connection applies both in subjective and in objective litigation. When determining standing in an objective litigation case, the court verifies that the

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flexible since case law has established a strict distinction between scientific causation and legal causation. Administrative judges adjust their definition of causal connection on a case-by-case basis by implicitly taking into account a wide range of factors, including the concern of protecting public finances, the urge to repair a serious damage caused at least partially by the government or the number of defendants. 38 The most salient aspect of the Affaire du Siècle may be the determination of the persons whose actions should be found at the origin of damages resulting from climate change. If applicants convince the Court of the certainty of damages and of the State’s fault, would the State bear sole liability? Anticipating this paramount question, applicants have referred to several rulings by the administrative courts, stating that “the liability of the State should be established, even when the alleged damage does not solely result from the government’s misconduct.”44 Nevertheless, the State can be exonerated, if the damage is imputable to a third person, totally or partially. In the latter case, administrative courts (as opposed to judicial courts) do not order the State to repair damages in full (in solidum). Administrative courts thus attempt to discourage applicants from systematically suing the State, so as to avoid that the State, which is always solvent, be forced into the role of a perpetual “de facto insurer.”45 39 Consequently, if judges found a causal connection between the damage and the State’s misconduct, as well as that of other persons (for instance, corporations emitting high levels of greenhouse gases), they would have to split the liability between the State and these other persons. But on what basis should the courts determine the share of liability that each category of actors should have to bear? In practice, judges might be tempted to avoid ruling on such a difficult question, either by finding the State not liable for any damage (in this case, the Courts might still establish the State’s misconduct for having failed to further regulate enough greenhouse gases emissions46), or by making the State liable in full, including for the damages caused by corporations.

III. Climate change litigation in private law Climate change litigation in private law, i.e. against companies, is embryonic in France. However, French law includes a certain number of legal provisions that could constitute the basis for future legal actions against companies, at least in theory. A very recent case, which is still ongoing, could provide a good illustration of this. 41 Three non-governmental organisations (Friends of the Earth France (Amis de la Terre France), National Association of Professionnal Environmentalists (NAPE) and Africa Institute for Energy Governance (AFIEGO) sued the French energy and oil company Total over an oil project called Tilenga Project in Uganda and Tanzania.47 The plaintiffs alleged that Total failed to adequately assess the project’s threats to human rights and the environment. Indeed, under France’s duty of vigilance law, French companies must identify and prevent risks to human rights and the environment that could occur as a result of their business practices (see below). 40

injury alleged by the applicant is the direct consequence of the disputed unlawful act. However, the burden of proof in demonstrating causal connection between the injury and the alleged misconduct is much heavier in a subjective litigation. 44 L’Affaire du Siècle, Mémoire complémentaire, 20 May 2019, available at: https://laffairedusiecle.net/ wp-content/uploads/2019/05/Argumentaire-du-M%C3%A9moire-compl%C3%A9mentaire.pdf. 45 Albert, Causalité administrative et causalité civile, Revue Lamy Droit civil, n° 40, 1/07/2007, Suppl. 46 Cf TA Montreuil, 25/06/2019, n° 1802202, Mme Farida T. 47 Cf https://www.amisdelaterre.org/wp-content/uploads/2019/12/rapport-totalouganda-at-survie2019.pdf.

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On 24 June 2019, Friends of the Earth France and five other NGOs (Survie, AFIEGO, CRED, NAPE and NAVODA) sent Total a formal request to revise its vigilance plan for the Tilenga Project, along with a report detailing alleged inadequacies in the vigilance plan.48 According to Friends of the Earth, the Tilenga Project includes plans to drill over 400 wells, extracting around 200,000 barrels of oil per day, and to construct a pipeline to transport the oil to Tanzania. More specifically, it involves exploiting the Ugandan reserves of the Lake Albert pond, discovered in 2006 and valued at more than 1.5 billion barrels. Total plans to drill 419 wells to produce approximately 200,000 barrels a day. In addition, it is the world’s longest (electrically heated) oil pipeline to transport viscous oil over 1445 km up to a port in Tanzania. Although the claimants’ report focuses on human rights and conventional pollution, it also argues that Total’s vigilance plan does not properly account for the project’s potential life cycle greenhouse gas emissions, in other words that a reference to climate change is missing from the vigilance plan. Then Total had a maximum period of three months to comply with the requests of those six organizations. Beyond that limit, they could seize the judge to order the company to fulfil those requirements or else to expose itself to financial penalties]’ astreinte financière). After Total rejected the allegations subsequent to a three month deadline, the complainants filed for a proceeding with an “urgent applications” judge (juge de référé), who was holding a hearing on 8 January 2020 at the Court of First Instance (tribunal de grande instance) of Nanterre. On 30 January 2020, the French court declined jurisdiction over the case that should be judged by the commercial court.49 Although the court did not examine the associations’ claims for disputable reasons, that court ruling is nonetheless very significant because it was the first case in which the law on the duty of vigilance of multinational companies concerning the consequences of the activities of a subsidiary of a large French group abroad was used, and it was the very first legal action under that law. The risk of a trial impacts first and foremost Total but can also affect the companies concerned by that law, because the uncertainty remains in particular on the scope of the plan of vigilance and thus of the civil liability which is attached to it. This will be subject to the judge’s interpretation, who could for example require an extension of the climate risk scope, going as far as consumer-related greenhouse gas emissions (“scope 3 emissions”).50 However, the sanctions imposed by the judge (new footnote to add: In this case the plaintiffs were not asking for damages, they were just requesting for “compliance” with an transparency obligation established by the duty of vigilance law.) appear of less importance to Total than the risk to further damage its reputation, and doing so in a context of popular awareness and judicialization of “climate inaction” affecting states as well as businesses. Anyway, and more generally, the French legislature has aligned business law with the reformed environmental protection law. To some extent, French business law is now explicitly linked to environmental concerns, including climate change.

48 https://www.amisdelaterre.org/wp-content/uploads/2019/09/dp-total-mise-en-demeure-pour-ses-activites-en-ouganda.pdf. 49 https://www.amisdelaterre.org/wp-content/uploads/2020/03/decision-tgi-nanterre-30012020-adt-survie-c-total.pdf. 50 The GHG Protocol Corporate Standard classifies a company’s GHG emissions into three ‘scopes’. Scope 1 emissions are direct emissions from owned or controlled sources. Scope 2 emissions are indirect emissions from the generation of purchased energy. Scope 3 emissions are all indirect emissions (not included in scope 2) that occur in the value chain of the reporting company, including both upstream and downstream emissions. See https://ghgprotocol.org/sites/default/files/standards_supporting/FAQ.pdf.

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Today, obligations stemming from company law and financial markets law are increasingly imposed on French businesses, notably companies, in order to make them sustainable and ecologically responsible. This may prevent the risk of climate change litigation in the future (because businesses become more sustainable and ecologically responsible, including fighting climate change), but also increase climate change litigation, albeit based on business law provisions (1.). One of the main reasons for this diversification of legal actions is that climate change litigation against companies under traditional civil liability law currently faces many obstacles in France (2.).

1. Making French companies eco-friendly through business law 49

Damage to the environment and human rights violations by multinational companies often make the headlines.| Many companies have responded to growing public and state pressure on this sensitive issue by developing strategies and actions for Corporate Social Responsibility (CSR) and/or Environmental, Social and Governance (ESG). The latter mainly result from contracts or contractual clauses and codes of conduct, that are often issued by the companies themselves. There is generally little or no hard law in that area, even if the situation varies from country to country. However, one of the current objectives is to move from soft law to hard law, and France seems to play a pioneering role here. It is possible to identify two types of business law tools making French companies sustainable and ecologically responsible: reporting (a), and adoption of environmentally responsible measures (b).

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a) Reporting. Two non-financial disclosure regimes creating transparency exist today in France , allowing shareholders, consumers, investors and other stakeholders to make their decisions on the basis of criteria under CSR/ESG: corporate law reporting (aa) and financial markets law reporting (bb).

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aa) Corporate law reporting. The French legislature introduced transparency rules in 2010 so that shareholders and investors can make their decisions based on CSR criteria (among other things). France has taken the path of legislation to sensitize companies to CSR, and in particular environmental/climate change protection, and to encourage them to integrate processes in that area.51 The regulatory tool is transparency: the French legislature demands that companies make their CSR more transparent for their stakeholders.

(i) Legal sources. In France, transparency (or reporting) obligations of companies on the social, environmental and social challenges of their business were set by law at an early stage, compared to other European countries. As early as 2001, law n° 2001‐420 of 15 May 2001 on New Economic Regulations (“sur les nouvelles régulations économiques”) provided in its Art. 116 I para. 4 that the management report (rapport de gestion) has to provide information “about the way in which a company takes into account the social and environmental consequences of its activity ”. That obligation was initially limited to listed companies. Article L. 225‐102‐1 of the Commercial Code (Code de commerce), which provided for this obligation, was specified by decree (décret) n° 2002‐ 221 of 20 February 2002 (Art. R. 225‐104 of the Commercial Code). 53 Article L. 225‐102‐1 of the Commercial Code was fundamentally reformed by Art. 225 I of the law of 12 July 2010, the Grenelle II law, which added a social pillar to the information requested about social and ecological responsibility and expanded the 52

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Cf Forget, Rev. sociétés 2015, 559 (559 et seq.).

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personal scope. The French legislature also introduced an independent third-party review of the delivered information. The Grenelle II law refers to a decree defining the methods of presentation of non-financial data in order to enable data comparison: decree n° 2012-557 of 24 April 2012 on the transparency obligations of companies related to social and ecological issues (“relatif aux obligations de transparence des entreprises en matière sociale et environnementale ”). In addition, Art. 225 II of the Grenelle II law introduced that requirement to four other codes, applying henceforth also to mutual insurance societies (société d’assurance mutuelle), banks (établissement de crédit), investment firms (entreprise d’investissement) and finance companies (compagnie financière).52 Finally, the French legislature has adapted the provisions to the requirements of 54 directive 2014/95/EU of 22 October 2014 on the publication of non-financial information by companies (so-called CSR directive), by adopting the regulation (ordonnance) n° 2017‐1180 of 19 July 2017 on the publication of non-financial information by certain large companies and groups of companies (“relative à la publication d’informations non financières par certaines grandes entreprises et certains groupes d’entreprises”) and the decree n° 2017‐1265 of 9 August 2017. With that reform, the legislature also responded to the need for a simplified, more concise and useful report. Recently, Art. L. 225‐102‐1 of the Commercial Code was slightly changed by laws n° 2018‐771 of 5 September 2018 (Art. 84), n° 2018‐898 of 23 October 2018 (Art. 20), and n° 2018‐938 of 30 October 2018 (Art. 55). (ii) Scope of application. In principle, all companies that exceed the thresholds set by the decree must include a “non-financial declaration of performance” (déclaration de performance extra-financière) in their management report and publish it (Art. L. 225‐ 102‐1 I and III para. 4 of the Commercial Code). For companies whose financial titles (titre financier) are admitted to trading on a regulated market, the following thresholds are envisaged: 500 employees and 20 million EUR balance sheet total (total du bilan) or 40 million EUR turnover (chiffre d’affaires) (Art. R. 225‐104 of the Commercial Code). Due to their activity, certain unlisted companies, which are on an equal footing with the listed companies or “assimilated” to them, are also subject to that obligation if they exceed the same thresholds. The following thresholds are provided for non-listed companies: 500 employees and 100 million EUR in balance sheet total or turnover (Art. R. 225‐104 of the Commercial Code). The thresholds for listed companies, apart from the number of employees, are significantly lower than those for unlisted companies. In addition, they are more demanding than the general thresholds formulated by the CSR directive (Art. 1 para. 1 (1)53). However, limited liability companies (société à responsabilité limitée, SARL) and simplified companies (société par actions simplifiée, SAS) are exempted from that reporting obligation in France. Article L. 225‐102‐1 II of the Commercial Code concerns the obligations in a company group. Companies that prepare consolidated financial statements must “publish a consolidated statement of non-financial performance if the balance sheet or turnover and the number of employees of all companies included in the scope of consolidation exceed the stated thresholds”. The subsidiaries are then exempted from reporting. This exemption also applies if the consolidating company has its registered office in another state of the European Union and publishes a declaration in accordance with its own national legislation (Art. L. 225‐102‐1 IV of the Commercial Code). 52 53

In more detail, Martin, Rev. sociétés, 2011, 75 (77). Cf Cuzacq, Rev. sociétés 2015, 707 (709).

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(iii) Content. The content of the “non-financial declaration of performance” is defined in Art. L. 225‐102‐1 III of the Commercial Code: “To the extent necessary to understand the situation of the company, the development of its business activities, its economic and financial results and effects of its activity”, the declaration contains: – for all companies: information on how the company takes into account the social and environmental consequences of its activity; – for listed and “assimilated” companies: the impacts of their activity regarding respect for human rights and the fight against corruption and tax evasion. The non-financial risks to which the company is exposed, the measures taken to limit those risks and the results of those measures must be presented for each of those categories of information. 60 The French legislature has not used the option offered by the EU directive allowing companies to omit information on impending developments or business negotiations in exceptional cases. However, French law provides for the report-or-explain mechanism in line with the directive: if the company does not take any action on one or more of the risks involved in its activity, “the statement shall contain a clear and reasoned explanation justifying it” (Art. R. 225-105 I of the Commercial Code). It is possible for companies not to report on the full list of required information, if it is not relevant to the main risks and identified measures. 59

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(iv) External audit. The “non-financial declaration of performance” is externally audited (Art. L. 225‐102‐1 V of the Commercial Code). It was important for the legislature to ensure the credibility of non-financial information by means of a control system, which ensures the comparability and reliability of the information published.54 The external audit is mandatory only for some companies. According to Art. R. 225‐ 105‐2 II of the Commercial Code, companies that exceed certain thresholds (100 million EUR balance sheet total or 100 million EUR turnover and 500 employees) must have their statement confirmed by a third independent organization (“organisme tiers indépendant”). That organization has to be accredited for this purpose according to an accreditation procedure by the French Accreditation Committee (Comité français d’accréditation, COFRAC) or by any other body that has signed the Multilateral Recognition Agreement established by the European Cooperation for Accreditation. In accordance with Art. R. 225‐105‐2 II of the Commercial Code, the independent third party draws up a report containing an opinion on the conformity of the statement with the legal provisions and the accuracy or “sincerity” of the information contained in it. As regards the publicity of the “non-financial declaration of performance”, each company must “without prejudice to the obligation to publish the report referred to in Article L. 225‐100” (Art. R. 225‐105‐1 III of the Commercial Code) make it freely available for the public on its website (Art. L. 225‐105‐1 III para. 4 of the Commercial Code) and do so within eight months from the end of the financial year for a period of five years (Art. R. 225‐105‐1 III of the Commercial Code).

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(v) Law enforcement tools/sanctions. Specific sanctions do not exist in French law55, and consequently, the general provisions apply, in particular for the management report. However, Art. L. 225‐102‐1 VI para. 2 of the Commercial Code permits imposing a financial penalty. If the management report does not include the mandatory information on ESG, “any interested person may request the President of the court, rendering summary

54 Mercier, in: Martin-Chenut/de Quenaudon (eds.), La RSE saisie par le droit, perspectives interne et internationale, 2015, 261 (274). 55 Martin, Rev. sociétés 2011, 75 (81).

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judgment, to issue an injunction to instruct the board of directors or the management board to submit such information, if appropriate under financial penalty [. .]”. It is certainly not surprising that in practice, the “non-financial declaration of performance”, while often present, is incomplete (for example, with regard to the specific risks associated with the company’s activity) or inaccurate. The following sanctions are conceivable in those cases: (vi) Civil remedies. Company officers who have included inaccurate or incomplete 63 information in the management report may be held liable under civil law in accordance with general principles. The auditor(s) may also be responsible under civil law if they fail to properly review the management report. It should be noted, however, that despite the apparent inadequacy of some reports published in the past, none of those sanctions seem to have been applied.56 But no litigation does not necessarily imply companies’ correct conduct.57 Consumer law also allows for the sanctioning of behaviour that does not respect ESG obligations, in particular when companies provide non-financial information that is false or misleading.58 Thus, Art. L. 121‐1 of the Consumer Code (Code de la consommation) allows both civil law and criminal proceedings against misleading and unfair advertising contained in a “non-financial declaration of performance”.59 According to some scholars, the law against unfair competition (droit de la concurrence déloyale) may also be used as the basis for a legal action for non-compliance with the obligations provided for in the “non-financial declaration of performance”.60 This is justified by the fact that the declaration is an important and useful communication medium to promote the company’s CSR strategy, which can give the company a competitive advantage by improving its reputation. (vii) Administrative measures and sanctions. According to French law, an adminis- 64 trative sanction (sanction administrative) is an administrative decision issued by an administrative authority to punish misconduct. Administrative sanctions are subject to the control of the administrative judge. The law specifies whenever the infringement of a rule is sanctioned administratively. Companies that are supervised by the French financial markets authority (Autorité des marchés financiers, AMF), their officers and auditors can be sanctioned by the AMF in the event of incorrect, inaccurate or misleading information (“information inexacte, imprécise ou trompeuse ”, Art. 223‐1 of the General Regulation of the AMF (“Règlement général de l’Autorité des marchés financiers ”, RGAMF)). The sanction committee of the AMF (Commission des sanctions de l’AMF) may, according to Art. L. 621‐15 of the Monetary and Financial Code (Code monétaire et financier), impose a fine (amende) on anyone who provided incorrect, inaccurate or misleading information, even though they knew or ought to have known that this information was incorrect, inaccurate or misleading. There is nearly no case law of the AMF sanctions committee concerning incorrect ESG reporting. What is noteworthy, however, is the AMF sanction procedure against the Chilean company Rhodia, which was accused of misinformation about the risk cover in 56

Ibid. Similar Trébulle, Dr. sociétés 2009, 7 (7 et seq.). 58 Mercier, in: Martin-Chenut/de Quenaudon (eds.), La RSE saisie par le droit, perspectives interne et internationale, 2015, 261 (278). 59 Ibid. See also Brunengo-Basso, Journ. des sociétés, May 2011, 55 (55 et seq.). 60 Mercier, in: Martin-Chenut/de Quenaudon (eds.), La RSE saisie par le droit, perspectives interne et internationale, 2015, 261 (278). 57

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connection with its environmental obligations.61 In its decision of 24 May 2007, the sanctions committee stated that there had been no erroneous information regarding the rules on the coverage of environmental risks. It is interesting that the AMF did not criticize provisions in the balance sheets of the company but dealt with the “qualitative” information in its half-yearly and annual reports.62 Erroneous information of the financial markets can therefore also occur in the narrative elements of reporting publicity. Article L. 621‐18 para. 3 of the Monetary and Financial Code also authorizes the AMF to require companies whose financial titles are traded on regulated markets (or on an organized multilateral trading system) to make corrections or additional disclosures. Should the issuers fail to comply with this request, the AMF may act itself after consulting the issuer. 65

(viii) Criminal law sanctions. Failure to prepare a management report will result in a fine of 9,000 EUR, namely in the cases of the public limited company (société anonyme) (Art. L. 242‐8 of the Commercial Code), the limited liability company (Art. L. 241‐4 1° of the Commercial Code) and the partnership limited by shares (société en commandite par actions) (Art. L. 243‐1 of the Commercial Code). If the annual general meeting of shareholders does not submit a report, this omission is punished with a prison sentence of six months and a fine of 9,000 EUR for public limited companies (Art. L. 242‐10 of the Commercial Code) as well as for limited liability companies (Art. L. 241‐5 of the Commercial Code) and partnerships limited by shares (Art. L. 243‐1 of the Commercial Code). If the management report is prepared and also submitted to the general meeting but contains incorrect information, Art. L. 242‐6 2° of the Commercial Code is not applicable, since it only refers to the annual financial statements (compte annuel) and not to the management report. However, Art. L. 465‐3‐2 of the Monetary and Financial Code could be applied , which sanctions the publication of (financial markets‐related) false information (diffusion de fausse information). That criminal liability can affect both company officers and the company itself. This applies in particular if certain information about ESG concerns is incorrect.63 However, the conditions are higher than those for the AMF’s administrative sanctions. Indeed, the incorrect information must have a certain “sensitivity” (sensibilité), i.e. an impact on the stock exchange price (“de nature à agir sur les cours ”), whereby it is sufficient that the information can influence the price. A minor error in the “non-financial declaration of performance” would therefore not fulfil the condition for a criminal offense.64 Above all, the one who spread the wrong information has to have acted knowingly; a mistake in good faith (bonne foi) or even faulty negligence (négligence fautive) cannot be punished under criminal law. Finally, sanctions could be imposed in relation to the rules applicable to the company’s accounting obligations if the environmental or social information has “implications in the company’s accounts” (“implications dans les comptes sociaux ”).65 In particular, actus reus of submitting incorrect accounts (Art. L. 242‐6 of the Commercial Code concerning public limited companies) could be met.66

61 More in depth Dezeuze, in: Trébulle/Uzan (eds.), Responsabilité sociale des entreprises, Regards croisés Droit et Gestion, 283 (291). 62 Dezeuze, in: Trébulle/Uzan (eds.), Responsabilité sociale des entreprises, Regards croisés Droit et Gestion, 2011, 283 (291). 63 Ibid. (292). 64 Ibid. 65 Ibid. 66 Ibid.

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To summarize, non-compliance with the general corporate reporting requirement for ESG matters can lead to significant sanctions. So far, however, the sanction regime has not yet become relevant in supervisory and judicial practice. bb) Financial markets law reporting. Broadening the scope of transparency in financial markets law and introducing a label for “green” financial products are efficient instruments, among others, to make finance environmental-friendly, instruments that are already in use in France. Currently, two labels exist regarding that matter: the Greenfin label (former “Energy and Ecological Change for the Climate” label), and the SRI label, which is a tool for choosing sustainable and responsible investments. The French legislature introduced the Greenfin label to ensure that investment funds contribute to the financing of energy and environmental change. Currently, there are 45 Greenfin labelled funds with 14 billion EUR assets.67 As to transparency obligations, the law on Energy Transition and Green Growth in 2015 aimed at encouraging institutional investors to take ESG aspects into greater account in their investment policy by means of disclosure obligations. Institutional investors should be encouraged to focus their activities on climate-related issues and to become actors of “green” growth. The number of institutional investors subject to specific ESG disclosure obligations in France is large (Art. L. 533‐22‐1 para. 3 of the Monetary and Financial Code)68. Investors include insurances, investment and asset management companies, and some entities of the public sector, for example pension funds for public services employees; banks however are not concerned with that obligation. The transparency obligations for those institutional investors distinguish between investor- and portfolio-related obligations (Art. D. 533‐16‐1 of the Monetary and Financial Code).69 A methodology for the evaluation is not prescribed by law. However, the investors must describe and justify the chosen evaluation methodology. They must also explain whether and how they take the results of their analysis into account in their investment policy. They are also required to set their own benchmarks, in order to check that their investment policy is consistent with the international climate protection targets (limiting global warming) and the national decarbonisation strategy. French law provides for a report‐or‐explain mechanism with regard to those transparency obligations: institutional investors have the right not to disclose information; in that case, however, they have to explain why they do not report. The French model encourages institutional investors to put their money more in environmentally sustainable activities. Thanks to transparency rules, investors can also be better informed about investments’ risks for climate change. Nonetheless, the French legislature will have to refer to European Law in that area. Indeed, on 24 May 2018, the Commission presented a series of legislative measures following up the first EU Action Plan on Financing Sustainable Growth. The proposal 67

Cf https://www.ecologique-solidaire.gouv.fr/label-greenfin#e3. Art. L. 533-22-1 para. 1 of the Monetary and Financial Code concerns asset management companies (société de gestion de portfolio) of UCITS (OPCVM) and certain AIF (FIA). The content of their reporting obligations is very similar to the content of the reporting obligations, set out in Art. L. 533-22-1 para. 3 of the Monetary and Financial Code for institutional investors. 69 Investor-related obligations apply to all of the above-listed institutional investors; they are required to describe their approach to the integration of ESG issues into their investment policy. Portfolio-related transparency obligations only concern some institutional investors, namely asset management and investment companies along with insurance undertakings; they are required to provide detailed information on climate change-related risks concerning their portfolio, and they must also disclose how they assess these risks in terms of ESG issues. 68

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for a regulation on disclosures relating to sustainable investments and sustainability risks (Com/2018/354 final) was part of that package. Recently, on 27 November 2019, the European Parliament and the Council adopted the Regulation (EU) 2019/2088 on sustainability‐related disclosures in the financial services sector. According to its Art. 1, “This Regulation lays down harmonised rules for financial market participants and financial advisers on transparency with regard to the integration of sustainability risks and the consideration of adverse sustainability impacts in their processes and the provision of sustainability‐related information with respect to financial products.”. 73 The transparency obligations of the EU disclosure regulation are less far-reaching than the current French transparency regime (the first only concerns investor-related transparency obligations with the sole aim of investor protection, even if its personal scope of obligations is larger). 74

b) Adoption of environmentally responsible measures. French law does not only require companies to report notably on environmental matters, including those having an impact on climate change. Companies subject to French law are also required to adopt measures in order to protect the environment, or they must at least take the environment into consideration.

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aa) Articles 1833 and 1835 of the French civil law. Law n° 2019‐486 on business growth and transformation (relative à la croissance et la transformation des entreprises) of 22 May 2019, which is part of the Action Plan for Growth and Transformation of Businesses (Plan d’action pour la croissance et la transformation des entreprises , PACTE), led to further reforms in the field of CSR/ESG in France. By amending Arts. 1833 and 1835 of the Civil Code (Code civil), Art. 169 of the PACTE law has brought about two important innovations in company law. On the one hand, it completes the definition of “company interest” (intérêt social) with social and ecological aspects, and on the other hand, it gives companies the opportunity to specify the “company’s purpose” (raison d’être) in their articles of association. Firstly, the newly added second paragraph of Art. 1833 of the Civil Code says expressis verbis: “The company is managed in its own interest, taking into account the social and ecological aspects of its activity” (“La société est gérée dans son intérêt social, en prenant en considération les enjeux sociaux et environnementaux de son activité.”). It should be noted that the new obligations concerning the company’s interest and the consideration of social and environmental issues are not subject to specific sanctions. However, conventional sanctions seem to be sufficiently dissuasive: dismissal and/or civil the company ans its officers70 and, if necessary, nullity of the company’s acts and decisions. Secondly, Art. 1835 of the Civil Code was supplemented with the following sentence: “The articles of association may specify a company purpose, which is based on the principles set by the company itself and for which it intends to provide means in the exercise of its activity.” (“Les statuts peuvent préciser une raison d’être, constituée des principes dont la société se dote et pour le respect desquels elle entend affecter des moyens dans la réalisation de son activité.”). Adopting a company purpose is an option, but if the company makes this choice, it is not without legal significance: the inscription of that purpose in the articles of association then requires compliance with it, in particular by allocating the necessary means.

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70 See in particular Haute Comité Juridique de la Place financière de Paris, “Rapport sur la responsabilite des societes et de leurs dirigeants en matiere sociale et environnementale et examen des consequences juridiques associees aux modifications apportees aux articles 1833 et 1835 du Code civil”, 19 June 2010, available on https://www.banque-france.fr/sites/default/files/rapport_32_f.pdf.

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bb) Duty of vigilance of parent and instructing companies. On 21 February 2017, 81 after many years and long conflictual debates with the Senate, the National Assembly adopted Law n° 2017‐399 on the duty of vigilance of parent and instructing companies (“relative au devoir de vigilance des sociétés mères et des entreprises donneuses ordre”). That law, promised by former President François Hollande during his presidential campaign, aims at preventing accidents such as the one caused in 2013 by the collapse of the Rana Plaza building in Bangladesh: more than 1,100 people were killed, mainly workers in textile workshops, whose production was intended for European clothing companies, including large French retailers. According to that law, companies will have to better control risks of all kinds associated 82 with their subcontracted supply chains. More precisely, the law on the duty of vigilance of parent and instructing companies requires public limited companies that have at least 5,000 employees in France or 10,000 worldwide, either directly or in their subsidiaries, to draw up, implement and publish a due vigilance plan (Art. L. 225‐102‐4 et seq. of the Commercial Code). The plan must include “reasonable vigilance measures, such as identifying risks and preventing serious violations of human rights and fundamental freedoms, individuals’ health and safety and the environment” (“mesures de vigilance raisonnable propres à identifier les risques et à prévenir les atteintes graves envers les droits humains et les libertés fondamentales, la santé et la sécurité des personnes ainsi que l’environnement”); among the environmental risks referred to in the law, the climate risk was not excluded by the legislature.71 It covers the activities of the company itself, its direct or indirect subsidiaries, subcontractors, and suppliers with whom the company maintains an established business relationship, if those activities are linked to that relationship (“une relation commerciale établie, lorsque ces activités sont rattachées à cette relation”). The vigilance plan includes the following measures in particular: – a risk map; – procedures to regularly assess the situation of subsidiaries, subcontractors or suppliers; – appropriate action to mitigate risks and prevent serious infringements or harm; – a mechanism for issuing alerts and gathering reports of the existence or occurrence of risks; – a system to monitor and assess the measures implemented. The vigilance plan and the report on its effective implementation must be published and included in the annual report of the board of directors or the management board to the general meeting of the company shareholders. What can be the potential penalties for failure to comply? Any concerned party is 83 entitled to request that a judge compel a company to establish, implement, or publish a vigilance plan. The law originally included civil penalty (amende civile) provisions for companies that do not establish or implement a plan, but these were struck down by the French Constitutional Council. More precisely, according to the bill passed by Parliament, failure to fulfil those obligations was to be punished with civil penalties of up to 10 million EUR (the civil fine could even be increased to 30 million EUR in the event of a violation of human rights). By applying the rules of tort law, in application of the general provisions of the Civil Code (Art. 1240), anyone with an interest in bringing an action may refer the 71 According to some scholars, the duty of vigilance regarding climate can be defined as a behavioural standard for the company marked by prudence and caution, in order to contain the effects of climate change; companies’ contribution to the climate change attenuation effort thus increasingly turns into in a positive environmental obligation to reduce emissions (Torre-Schaub (dir.), Les dynamiques du contentieux climatique, Usages et mobilisations du droit pour la cause climatique, final research report, Dec. 2019, p. 194).

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matter to the judge. On 23 March 2017, the Constitutional Council released a decision (n ° 2017‐750 DC) upholding the majority of the legislation but striking down the suggested civil penalties for companies that fail to develop a vigilance plan. That said, companies can nevertheless be subject to civil liability if individuals harmed by a company’s failure to establish or implement a plan seek damages for corporate negligence. Following the Constitutional Council’s decision, the duty of vigilance law came into force on 28 March 2017. 84 This law is important for at least two reasons. Firstly, it breaks off the political approach, widely used in Europe but also in the world, which favours voluntary selfregulation and market mechanisms in this area to punish human rights violations and damage to the environment by companies. The law relating to the duty of vigilance of parent companies and instructing companies goes further, by imposing on large companies mandatory obligations of vigilance regarding matters related to human rights and the environment, the violation of which could be sanctioned by bringing into play their civil liability. 85 Secondly, the law targets not only the risks of human rights violations and environmental damage resulting from the activities of the company itself, but also from the activities of its subsidiaries, subcontractors and independent suppliers, with whom the company has established a business relationship. For example, a French company falling within the scope of this law could thus be held liable under civil law for environmental damage caused by its subcontractors in Bangladesh, since it has not adopted reasonable vigilance measures. However, companies (in France but also in most other countries) are in principle not responsible for damage caused by subsidiaries, subcontractors, and independent suppliers, even if the latter are in fact under their control. The law on the duty of vigilance of parent and instructing companies makes it more difficult to outsource the risks of human rights violations and environmental damage to companies in developing and emerging countries. However, the effective scope of that law will greatly depend on the interpretations of the judge. In particular, it will be necessary to clarify what exactly constitutes “reasonable vigilance measures” along the supply chain; the above-mentioned Total case illustrates those difficulties. We are still a long way from legal sanctions, but that phenomen should not be minimized (Torre-Schaub (dir.), Les dynamiques du contentieux climatique, Usages et mobilisations du droit pour la cause climatique, final research report, Dec. 2019, p. 194). Neither should be the shareholder activism, leading shareholders to question companies on their reactions and actions, in particular regarding climate change (See TRÉBULLE, «Le rôle des acteurs privés», in TORRE-SCHAUB (dir.), Bilan et perspectives de l’Accord de Paris (COP 21), Regards croisés, IRJS éd, 2017, p. 121 et seq.; M. TORRE-SCHAUB, d’AMBROSIO and LORMETEAU (dir), «Changement climatique et responsabilité», Rev. Energie – Environnement – Infrastructures, n° 8-9, 2018, p. 20 et seq.).

2. Conditions and limits to the engagement of climate change civil liability: analysis of the difficulties and solutions to overcome them 86

Civil law litigations between certain people and specific companies considered responsible for their share of global warming, and more generally for damage to the environment, are very limited in France; there is no court decision in that field yet. The reasons are cultural and sociological but above all legal: there are many obstacles originating mainly from civil law but also from procedural law to engage civil liability of companies, with no specific provisions regarding climate change litigation (a). French scholars thus suggest solutions that may extend the traditional rules on tort liability in particular, thus overcoming the difficulties (b).

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a) Conditions and limits to engage climate change civil liability of companies. The 87 following will offer first a short presentation of tort law, pursuant to the general provisions of the Civil Code, and procedural law (aa), and secondly observations on their application to climate change litigation, highlighting the obstacles it has to face in practice in France (bb). aa) French tort law and procedural law. French civil liability is traditionally divided between tort law and contract law. According to Art. 1240 of the Civil Code, the general rule of tort liability is that “Any human action whatsoever that causes harm to another creates an obligation in the person by whose fault it occurred to make reparation for it.” (“Tout fait quelconque de l’homme, qui cause à autrui un dommage, oblige celui par la faute duquel il est arrivé à le réparer.”). Article 1241 of the Civil Code adds that “Everyone is liable for harm which he has caused not only by his action, but also by his failure to act or his lack of care.” (“Chacun est responsable du dommage qu’il a causé non seulement par son fait, mais encore par sa négligence ou par son imprudence.”). Thus, three elements are necessary to engage civil (tort) liability: a fault (faute), a damage (dommage), and a causal link (lien de causalité) between the two. The burden of proof of all those elements falls on the claimant. Firstly, a fault may result either from committing an act or from neglecting to perform an act. Generally speaking, fault can be defined as a misconduct measured against the standard of a reasonable person. Furthermore, in order to commit a tort, one does not necessarily need to be aware of the wrongful nature of one’s behaviour; neither is a specific duty of care towards the plaintiff necessary. Since fault is a very subjective notion, courts have great discretion in attaching liability, in particular regarding circumstances of the case. It should also be noted that French general provisions on tort liability do not limit the scope or nature of protected rights and interests. Consequently, all rights and interests are in principle protected. Secondly, the damage is another condition, but neither scholars nor courts have discussed that notion a lot.72 The French law mainly deals with the characteristics which the damage must fulfil in order to be compensated: the damage must actually exist and be certain, and it must be directly related to the plaintiff. But case law has developed a specific damage named “loss of an opportunity”, or “loss of a chance” (perte d’une chance), which consists in the victim’s loss of an opportunity to obtain an advantage or to avoid a loss. Thirdly, tort liability only arises if there is a direct causal relationship between the fault and the damage. Neither the legislature nor judges have precisely defined that relationship; the latter therefore have a rather broad discretion. However, causation is sometimes perceived in the light of two requirements concerning damage, namely directness and certainty. If those three criteria are fulfilled, a person is entitled to claim compensation for a broad scope of damages: material and financial damage, bodily injury, moral injury. French civil law is governed by the principle of full compensation: the compensation should comply with the damage as completely as possible, which sometimes proves difficult. Articles 1240 and 1241 of the Civil Code are also widely considered not to contain any a priori limitation as to the class of protected persons, i.e. there is no necessity to

72 Regarding the difficulty of monetarily assessing the damage, recent French case law provides assistance, however: as soon as the judge implicitly recognizes the damage, even when its estimation is in question, it must be evaluated, if necessary by experts (Cass. crim., 22 March 2016, n° 13-87.650; cf Cossart/Sohm in: Cherief/Ravillon (eds.), Entreprise et environnement, 2018, 119 (131)).

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prove the existence of a duty of care towards the plaintiff for example. In other words, every plaintiff who can prove fault, damage and causation can claim compensation. 93 Finally, it should be noted that defendants in civil liability lawsuits may assert several causes of exoneration or limitation of their liability (for example “force majeure”; fault of the victim, or contributory negligence; act of a third party breaking the chain of causation). 94 As to French procedural law, pursuant to Art. 31 of the Code of Civil Procedure (Code de procédure civile), a lawsuit is admissible only if the plaintiff has standing and an interest in bringing the claim (“The right of action is available to all those who have a legitimate interest in the success or dismissal of a claim, without prejudice to those cases where the law confers the right of action solely upon persons whom it authorizes to raise or oppose a claim, or to defend a particular interest.”). 95 Standing consists in the legal right to bring or oppose a claim and to defend a specific interest in court. Natural persons bringing a civil action in liability generally are presumed to have a standing to act. However, it is more problematic when a legal person, an association for instance, purports to defend the collective interests of a category of persons, i.e. the common interests of their members, or a “social cause”. Indeed, one of the major principles in French law is that “no one pleads by proxy” (nul ne plaide par procureur), another one being the principle of the relative effects of judgments. Therefore, individual interests may not be aggregated, and even if they are grouped together in a single lawsuit, each plaintiff will have to formulate his or her own claims, which are evaluated separately. As a result, class actions as such do not exist under French Law.73 bb) Application to climate change litigation. Numerous procedural and substantial obstacles exist for civil liability actions against companies. Firstly, with regard to the substance, the plaintiff must provide proof of the fault, the damage, and the the causal link according to French general provisions on tort liability. The difficulty of proving the causl link is often the main obstacle to successful climate change litigation.74 The allocation of liability raises also many questions.75 Indeed, in climate change litigation, unlike fault and damage, the causal relationship that connects them “remains intangible and immaterial”.76 The causal relationship in areas relating to health and environmental damage is often difficult to demonstrate77, and climate change is even exacerbating those challenges.78 97 Indeed, climate change litigation often involves cascading damage, thus requiring proof of a plurality of combined or successive causalities, in other words a chain of causalities which is often threefold: a causal connection between (1) greenhouse gas emissions of a company and global warming, (2) global warming and the climatic event in question and (3) the climatic event in question and the damage. In particular the first causal link between greenhouse gas emissions of a company and global warming is very difficult to prove. The general causal link between activities 96

73 However, there are a few legislative exceptions to this rule. For example, pursuant to Art. 421-1 of the Consumer Code, consumer associations may bring collective civil actions under specific conditions. 74 Huglo, Le contentieux cimatique: une révolution judiciaire mondiale, 2018, 227. 75 Canali, in: Cournil/Varison (eds.), Les procès climatiques, entre le national et l’international, 2018, 67 (72). 76 Ibid. (73). 77 Environmental damage can cause many different types of damage (economic, moral, ecological). And even within ecological damage, a distinction must be made between pure ecological damage (damage to nature itself) and indirect or derivative damage suffered by individuals (Cossart/Sohm in: Cherief/ Ravillon (eds.), Entreprise et environnement, 2018, 119 (130). In any case, French law requires the damage to be of a personal nature, which makes it difficult to compensate the ecological damage. 78 Lafforgue, in: Cournil/Varison (eds.), Les procès climatiques, entre le national et l’international, 2018, 233 (233).

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emitting greenhouse gas and global warming is no longer disputed since it is now recognised worldwide as scientifically established; on the other hand, the specific causal link between a company’s activities and global warming questions whether the latter and greenhouse gas emissions can be totally or partly attributed to that company, a question that arises much uncertainty.79 Under French law, the causal link must remain unbroken until arriving at the damage suffered by the plaintiff, who must therefore describe and prove each of those different links. Consequently, the uncertainty affecting those causal links causes civil liability to fail. Put differently, one obstacle is that of the “overstretched spatiality” of damage. Unlike 98 pollution, greenhouse gases do not directly and locally affect human beings and ecosystems; the link between a localized source of emissions and locally identified damage is therefore difficult to demonstrate.80, 81 It should also be noted that climate change is not just caused by human beings, in particular companies. Each factor thus brings with it uncertainty; for example, a disease can come from climate change and/or from more personal causes. It comes down to partial liability, which does not exist in French law. In any case, French judges have not ruled on the theory of causation in climate change cases yet. If a French court, applying the general rules of tort law, were to retain the civil 99 liability of companies, then the question of the extent of liability and its allocation would arise. Indeed, in French climate change litigation, the determination of the role of each cause in the genesis of the damage is an even more delicate question than that of causal link.82 Faced with a plurality of causes, the compensation charge should be divided between the co-authors of the damage. However, there is currently no satisfactory legal technique to quantify causation, in order to say which event is more causal.83 The indivisibility of the causal link remains the main reason for the impossibility of quantifying the causal role of the various antecedents of climate damage.84 Faced with situations involving multiple causes, French judges generally favour the criterion of the seriousness of the misconduct over that of the causal role.85 Secondly, with regard to procedure, French law requires in particular an interest in 100 bringing an action. It is interesting here to note that in France, the concept of ecological damage has received legislative value through the law relating to biodiversity (law n° 2016‐1097 of 8 August 2016) and has entered into the Civil Code (arts. 1246 et seq.). More precisely, it came to validate the judicial recognition resulting from the Erika judgment ruled by the Criminal Chamber of the Court of Cassation (Cour de cassation), which is the

79 Duminy, “Contentieux climatique et problématiques relatives à l’établissement du lien de causalité”, in: Haut Comité Juridique de la Place financière de Paris, Rapport sur la responsabilite des societes et de leurs dirigeants en matiere sociale et environnementale et examen des consequences juridiques associees aux modifications apportees aux articles 1833 et 1835 du Code civil, 2020, p. 86, n° 20). 80 The non-immediacy of the effects of global warming, coupled with uncertainty about their effects, makes it difficult to determine a material causation and – even more so – a legal causation. 81 Another difficulty is the multiple nature of causation. The emissions of greenhouse gases are the result of several thousands of issuers in the past and today, in France and in the world. The emissions of only one issuer, for example a specific company, are not sufficient to explain climate change. 82 Canali, in: Cournil/Varison (eds.), Les procès climatiques, entre le national et l’international, 2018, 67 (75). 83 Ibid. 84 Ibid. 85 For ex., Cass. civ. 1, 22 Oct. 1996, n° 94-19.828; Cass. civ. 1, 14 February 2008, n° 07-11.710; Cass. civ. 2, 20 June 2002, n° 00-20.996.

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highest court in the French judiciary, on 25 September 2012.86 Article 1248 of the Civil Code, which refers to the legal action for compensation of ecological damage, establishes a non-exhaustive list of the persons entitled to initiate such an action by using the expression “any person having the capacity and interest to act”. In the presence event of an invoked “pure” ecological damage, the interest in bringing the claim in environmental matters has become more obvious. Indeed, that interest does not necessarily have to be direct and personal, when the damage directly and globally affects the environment and has consequences for future generations.87 101 Today, scholars are questioning whether, pursuant to French general provisions on tort liability and on procedure, those different problems can be overcome in order to facilitate climate change litigation. b) Solutions to facilitate climate change litigation. Regarding the civil liability of companies for climate change, to date, there has been only little in-depth academic research in France, in spite of a growing interest. However, scholars have offered some interesting proposals to facilitate climate change litigation, and these will be briefly highlighted here. 103 First, to overcome the difficulty of characterizing company misconduct and thus grant compensation to the victims of climate change, it would be possible to institute a derogatory regime of civil liability without fault, as it exists for example for civil servants whose illness is attributable to service, or for victims of asbestos or nuclear tests who can benefit from compensation without having to demonstrate any fault, in particular through compensation funds.88 Even if a fault should be proven, climate change litigation could be inspired by solutions adopted by French courts in a few cases on the basis of the duty of care89 or the precautionary principle90 or by decisions made in the environmental field.91 104 Secondly, concerning causation, French positive law, and more particularly case law on civil liability in the fields of health and the environment, allows solutions to overcome the difficulties arising from the specificities of climate change litigation, and in particular regarding the proof of the causal link between global warming and the climatic event in question. Indeed, that link relies on a scientific certainty which varies according to the climatic event in question; if there is no scientific certainty, French courts could accept the establishment of such a causality referring to serious, precise and consistent presumptions.92 105 More precisely, doubt about causation can be scientific or legal. To surmount those uncertainties, it could be possible to resort especially to scientific causation. French case law concerning vaccine is interesting in this respect, in particular regarding the Court of Cassation’s decision on multiple sclerosis in 2008.93 According to that decision, 102

86 Cass. crim., 25 September 2012, n° 10-82.938. Cf Huglo, Le contentieux cimatique: une révolution judiciaire mondiale, 2018, 213. 87 Huglo, Le contentieux cimatique: une révolution judiciaire mondiale, 2018, 214. 88 Lafforgue, in: Cournil/Varison (eds.), Les procès climatiques, entre le national et l’international, 2018, 233 (234). 89 So-called distilbène case, concerning the liability of a drug manufacturer for not having withdrawn the product from the market when its risks were known, on the basis of the breach of the duty of care, Cass. civ. 1, 7 March 2006, n° 04-16179 and n° 04-16180; cf Lambert-Faivre/Porchy-Simon , Droit du damage corporel – Systèmes de compensation , 2009, n° 653. 90 Cf CE, 15 February 2018, n° 41–395. 91 Lafforgue, in: Cournil/Varison (eds.), Les procès climatiques, entre le national et l’international, 2018, 233 (234 et seq.). 92 Ibid. (238). 93 Cass. civ. 1, 22 May 2008, n° 06-10.967. Cf Cass. civ. 1, 24 Jan. 2006, n° 03-20178 concerning growth hormones; Cass. civ. 1, 7 March 2006, n° 04-16179 and n° 04-16180 concerning diethylstilbestrol (distilbène); Cass. civ. 1, 20 Sept. 2017, n° 16-19643, so-called mediator case.

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scientific doubt can be overcome with serious, precise and consistent presumptions. As for legal causation, case law is sometimes satisfied with a “body of evidence” and sometimes even with the use of statistical elements. Another possibility consists in using presumptions of law, which are more easily employed by special regimes of compensation.94 Faced with the problem of a plurality of causes, all of which were involved in the damage, but only partly and without the possibility of assigning to each of them a given share in the extent of the damage, one scholar argues for the recognition of a cumulative causation in climate change litigation.95 The reform project of civil liability could provide help to complainants in the field of climate change litigation in future since it could introduce a new text that would state: “When physical injury is caused by an indeterminate person among identified persons acting in concert together or carrying out a similar activity, each of them answers for the whole, except to demonstrate that they cannot have caused it. Those responsible then each contribute in proportion to the probability that everyone has caused the damage.” («Lorsqu’un dommage corporel est causé par une personne indéterminée parmi des personnes identifiees agissant de concert ou exeroçant une activité similaire, chacune en répond pour le tout, sauf à démontrer qu’elle ne peut l’avoir causé. Some other scholars prefer to diversify the legal means called upon in climate change litigation by using other civil liability mechanisms to bring an action against companies, drawing from other areas of civil law96, in particular special civil liability regimes. Indeed, beyond the general provisions on tort liability, French civil liability law is broken down into a large number of special regimes of liability. Some of those regimes could foster debate on how to hold companies liable for climate change–related impacts , for example liability for damage resulting from abnormal neighbourhood disturbances97 and liability due to defective products.98 It should also be noted that French scholars discuss some other legal bases for actions against companies, in particular Art. L. 1110‐2 of the Environmental Code (“The ill person has the right to personal dignity”) and/or the right to a healthy environment. Finally, with specific regard to the parent company’s civil liability for its subsidiary, some scholars argue that other legal bases for civil liability may be considered, in particular vicarious liability (Art. 1242 of the Civil Code), which allows a person to be held responsible for the acts of another person.99 To summarize, French courts have never put companies’ climate change civil liability into practice. Indeed, there are major obstacles to doing so. Today the litigation strategies are thus becoming more diverse, and the legal means that can be called upon in climate change litigations are being adapted, in order to compel companies to pay their share of the climate change damage. Admittedly, the Civil Code has not (yet) 94 There are in particular various fields where the legislature or the judge have established regimes of presumption: recognition of workplace accidents and professional diseases, see Cass. civ. 2, 9 March 2017, n° 15-00264; anxiety prejudice, Cass. soc. 11 May 2010, n° 09-42241 to n° 09-42257; compensation funds (cf Lafforgue, in: Cournil/Varison (eds.), Les procès climatiques, entre le national et l’international, 2018, 233 (238 et seq.). 95 Canali, in: Cournil/Varison (eds.), Les procès climatiques, entre le national et l’international, 2018, 67 (74). 96 Ibid, 77. 97 For more details, cf Canali, in: Cournil/Varison (eds.), Les procès climatiques, entre le national et l’international, 2018, 67, 77 et seq. 98 Ibid, 78 et seq. 99 Cf Cossart/Sohm, in: Cherief/Ravillon (eds.), Entreprise et environnement, 2018, 119, 128 et seq.

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changed much, but civil liability has been able to adapt by means of case law. It is thus legitimate to consider that civil liability will have its role to play in climate change litigation and will adapt to social needs. Judges will certainly have new opportunities to rule on the potential recognition of the climate change liability of large issuers of greenhouse gases. As a conclusion, we can observe an increasing risk for companies in France linked to climate change litigation.

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R. Climate change litigation in the Netherlands – the Urgenda case and beyond Bibliography: Huang/Tigre, Trends in Climate Justice Litigation: The Dutch Case and Global Repercussions, in: Abate (ed.), Climate justice: case studies in global and regional governance challenges, Washington, DC: Environmental Law Institute (2016); Burgers/Staal, ‘Climate action as positive human rights obligation: The appeals judgment in Urgenda v the Netherlands’ in Wessel, Werner, Boutin (eds.), Netherlands Yearbook of International Law 2018, T.M.C. Asser Press, 2019; De Graaf/Jans, ‘Liability of Public Authorities in Cases of Non-Enforcement of Environmental Standards’ (2007) 24 Pace Environmental Law Review; De Graaf/Jans, The Urgenda Decision: Netherlands Liable for Role in Causing Dangerous Global Climate Change, Journal of Environmental Law (2015) 27; Leijten, Human rights v. Insufficient climate action: The Urgenda case, Netherlands Quarterly of Human Rights (2019), 37(2); Roy/ Woerdman. ‘Situating Urgenda v the Netherlands within comparative climate change litigation’ (2016) 34 (2) Journal of Energy and Natural Resources Law; Roy, ‘Urgenda II and its Discontents’ (2019) 13(2) Carbon & Climate Law Review; Stein/Castermans, ‘Case Comment – Urgenda v. the State of the Netherlands: The “Reflex Effect” – Climate Change, Human Rights, and the Expanding Definitions of the Duty of Care’ (2017) 13(2) McGill Journal of Sustainable Development Law; Van der Veen/De Graaf, Climate litigation, climate act and climate agreement in the Netherlands. An update, in: Roggenkamp/ Banet (eds.), European Energy Law Report. Cambridge: Intersentia, Vol. XIII.

Contents I. Introduction ..................................................................................................... II. The Urgenda case ........................................................................................... 1. The District Court judgment ................................................................... 2. The Court of Appeal ruling ..................................................................... 3. The Supreme Court decision ................................................................... 4. Analysis and critique ................................................................................. III. Other developments in the Netherlands ................................................... 1. Friends of the Earth versus Shell ............................................................ 2. The Climate Act.......................................................................................... a) Targets of the Climate Act.................................................................. b) Instruments provided by the Climate Act....................................... c) Targets of the Climate Act.................................................................. 3. The Climate Agreement............................................................................ IV. Conclusions ......................................................................................................

1 7 8 10 12 28 36 37 41 42 45 49 52 59

I. Introduction The Dutch climate case ‘Urgenda’ has attracted worldwide media attention since 1 2015. In that year, for the first time a court of law ordered a state to adopt measures to tackle climate change.1 The Hague District Court ruled that the State must take more action to reduce greenhouse gas emissions in the Netherlands. It ordered the State to ensure that Dutch greenhouse gas emissions in the year 2020 would be at least 25 % lower than the 1990 levels. The Urgenda Foundation, partly on behalf of 886 Dutch concerned citizens, had requested that the court issue a ruling.2 1 This chapter builds on Van der Veen/De Graaf, Climate litigation, climate act and climate agreement in the Netherlands. An update, in: Roggenkamp/Banet (eds.), European Energy Law Report, Cambridge: Intersentia, Vol. XIII. 457‐469. 2 The Hague District Court, 24‐06‐2015, ECLI:NL:RBDHA:2015:7145, AB 2015/336 note Backes, O&A 2015/58 note Oztürk/Van der Veen, ECLI:NL:RBDHA:2015:7196 (English translation). Also see De Graaf/

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Late 2018, the Hague Court of Appeal confirmed the District Court’s judgment, albeit on different grounds.3 Just before the end of 2019, the Supreme Court came to its long awaited final judgement in this case. It upheld the ruling of the Court of Appeal, adding to the already extended and impressive reasoning of the Supreme Court a quite remarkable overview of the State’s changes of viewpoint regarding the necessary timeframe to reduce greenhouse gas emissions.4 Section 2 of this chapter introduces, analyses and discusses this ground-breaking case. The Urgenda case is not the only development in the Netherlands. First, the success of the Urgenda case has inspired other environmental groups in the Netherlands. Friends of the Earth, another environmental action group, has brought legal action against a large corporation: Shell. Friends of the Earth thinks that Shell should stop causing environmental damage. Friends of the Earth is of the opinion that not just the state, but companies like Shell also have a responsibility not to cause society and the climate any harm. Second, it appears that all branches of Dutch government are more actively involved in climate mitigation efforts than they were in 2015. In addition to the judiciary, they are the legislative and administrative branches within the Dutch system of separation of powers (Trias Politica). The Dutch legislator introduced a Climate Act (Klimaatwet). This Act of 2 July 2019 sets up a framework for the development of policy and the introduction of mitigation measures aimed at the irreversible and phased reduction of Dutch greenhouse gas emissions by 2050 in order to reduce global warming and climate change. Third, the Dutch administration, in close cooperation with industry and societal parties, worked towards an agreement on voluntary measures to reduce the emissions of greenhouse gases in the Netherlands (Klimaatakkoord, or Climate Agreement) and succeeded in June 2019. The Climate Agreement is an agreement between a multitude of Dutch stakeholders with the aim of devising measures to reduce global warming as a result of greenhouse gas emissions, allowing the Netherlands to meet the European and international targets for 2030 and 2050. Covering 600 measures to reduce greenhouse gas emissions, the Agreement can be seen as one of the instruments used by the Netherlands to abide by the order contained in the judgments of the District Court and the Court of Appeal, although the Agreement refers primarily to the year 2030. The Climate Agreement also complements the Climate Act in the sense that the Climate Act itself does not incorporate any measures to reduce the emission of greenhouse gases but does impose upon the government the obligation to draft a document incorporating such measures for the purpose of achieving the climate targets laid down in the Act. Section 3 of this chapter provides an overview of the three developments in the Netherlands closely related to the Urgenda case. In this chapter, we will examine the remarkable Urgenda court case and will pay attention to the other three developments as well. A pivotal question we will address in the process is the extent to which climate targets are enforceable in a court of law. The Urgenda court case proves enforceability. Can the same be said regarding the Shell case? Besides, do the Climate Act and the Climate Agreement offer citizens and nonJans, The Urgenda Decision: Netherlands Liable for Role in Causing Dangerous Global Climate Change, Journal of Environmental Law (2015) 27, 3, 517‐527. Huang/Tigre, Trends in Climate Justice Litigation: The Dutch Case and Global Repercussions, in: Abate (ed.), Climate justice: case studies in global and regional governance challenges, Washington, DC: Environmental Law Institute (2016), 571‐596. 3 The Hague Court of Appeal 09‐10‐2018, ECLI:NL:GHDHA:2018:2591, AB 2018/417 note Backes/ Van der Veen, O&A 2018/51 note Oztürk/Van der Veen, ECLI:NL:GHDHA:2018:2610 (English translation). 4 Supreme Court 20‐12‐2019, ECLI:NL:HR:2019:2006, AB 2020/24 note Backes/Van der Veen, ECLI: NL:HR:2019:2007 (English translation).

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R. Climate change litigation in the Netherlands – the Urgenda case and beyond

governmental organisations sufficient arguments to bring legal action to enforce specific international, European and national targets?

II. The Urgenda case The Urgenda case revolves around at least two questions. The first question is 7 whether there are any legal grounds that can result in a court ruling ordering the state to adopt (drastic) climate measures. The second question is whether a court of law, when delivering a judgment against the state in this case, would effectively take the place of the legislator.

1. The District Court judgment The District Court started its reasoning by acknowledging that, based on the State’s 8 current climate policy, the Netherlands will achieve a reduction of at the most 17 % in 2020, which is below the norm of 25‐40 % for developed countries deemed necessary in climate science and international climate policy, such as Report IPCC 4 (see below). Urgenda based its assertion that the State was acting unlawfully towards it on Book 6 9 Section 162 of the Dutch Civil Code (DCC) and Articles 2 and 8 of the European Convention on Human Rights (ECHR). Urgenda argued that the State failed to meet its duty of care to its citizens and therefore acted unlawfully towards them. The District Court ruled that Urgenda did not meet the requirements to invoke Articles 2 and 8 ECHR, but it accepted the Civil Code as a valid basis. According to the District Court, the State must do more to avert the imminent danger caused by climate change, also in view of its duty of care to protect and improve the living environment as laid down in the Dutch constitution. The State’s duty of care is further influenced by the international obligations the State has taken on vis-à-vis other states by adopting international treaties. The State is responsible for effectively controlling the Dutch emission levels. Moreover, the costs of the measures ordered by the court are not unacceptably high. Therefore, the State should not hide behind the argument that the solution to the global climate problem does not depend solely on Dutch efforts. Any reduction of emissions contributes to the prevention of dangerous climate change and as a developed country, the Netherlands should take the lead in this. Moreover, the District Court held that the judiciary does not enter the domain of politics when ordering the Dutch State to make sure Dutch greenhouse gas emissions are reduced by at least 25 % in 2020 compared to 1990.5 The Court considered that its duty is to provide legal protection, also in cases against the government, whilst respecting the government’s scope for policymaking. For these reasons, the Court exercised appropriate restraint and therefore limited the reduction order to 25 %: the lowest limit of the 25‐40 % norm that follows from climate science, most notably the IPCC’s Fourth Assessment Report 2007. On 1 September 2015, the Dutch government released a statement to the press that the Netherlands will both ‘begin implementation of Urgenda ruling’ and ‘file appeal’. The government questioned the Court’s reasoning on several points.

5 See Stein/Castermans, Case Comment – Urgenda v. the State of the Netherlands: The “Reflex Effect” – Climate Change, Human Rights, and the Expanding Definitions of the Duty of Care, (2017) 13(2) McGill Journal of Sustainable Development Law, 305–324; Roy/Woerdman. Situating Urgenda v the Netherlands within comparative climate change litigation, (2016) 34(2) Journal of Energy and Natural Resources Law, 165–189. De Graaf/Jans, The Urgenda Decision: Netherlands Liable for Role in Causing Dangerous Climate Change, (2015) 27(3) Journal of Environmental Law, 517–527.

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2. The Court of Appeal ruling As stated above, the Court of Appeal upheld the judgment.6 This time, though, Urgenda’s reliance on Articles 2 and 8 ECHR was successful. In short, the Court of Appeal ruled that State has a positive obligation to protect the lives of citizens within its jurisdiction under Article 2 ECHR, while Article 8 ECHR creates the obligation to protect the right to home and private life. This obligation applies to all activities, public and non-public, which could endanger the rights protected in these articles, and certainly in the face of industrial activities, which are dangerous by their very nature. If the State knows of the existence of a real and imminent threat, it must take precautionary measures to prevent infringement of the right to life to the extent possible. According to the Court of Appeal, this required the Court to assess the asserted (imminent) dangerous climate change. Having heard the arguments, the Court believed that it is appropriate to consider dangerous climate change a real threat, resulting in the serious risk that the current generation of citizens will be confronted with loss of life and/or a disruption of family life. Thus, it follows from Articles 2 and 8 ECHR that the State has a duty to protect against this real threat.7 11 The Court of Appeal ruled that the emissions reduction of at least 25 % by end 2020, as ordered by the District Court, was in line with the State’s positive obligation under Articles 2 and 8 ECHR to put in place an appropriate legislative and administrative framework to provide effective deterrence against threats to the right to life. The Court of Appeal also addressed the argument that it would enter the domain of politics. The State had argued that limiting the cumulated volume of Dutch greenhouse gas emissions, as ordered by the District Court, could only be achieved by adopting (binding) new legislation and regulations, either by Parliament or lower governmental bodies. This would mean that from a substantive point of view the District Court’s order constituted an obligation to create and adopt legislation and that the District Court was not in the position to impose such an order on the State. In fact, such an order would be at odds with Dutch ideas on the separation of powers. However, according to the Court of Appeal the District Court correctly considered that Urgenda’s claim was not intended to create legislation, either by Parliament or lower government bodies, and that the State retained complete freedom to determine how it would comply with the order. Even if it were correct to hold that compliance with the order can only be achieved through creating legislation by Parliament or lower government bodies, the order in no way prescribes the content of such legislation. For this reason alone, the order was not an ‘order to create legislation’, according to the Court. The Court of Appeal added that it is obliged to apply provisions with direct effect of treaties to which the Netherlands is party, including Articles 2 and 8 ECHR. After all, such provisions form part of the Dutch jurisdiction and, according to the Dutch Constitution, even take precedence over Dutch laws where the latter deviate. After the ruling by the Court of Appeal, the Dutch government reiterated its intention to abide by the judicial order but nevertheless also lodged an appeal with the Supreme Court of the Netherlands. 10

6 See Roy, Urgenda II and its Discontents, (2019) 13(2) Carbon & Climate Law Review, 1–12. Burgers/ Staal, Climate action as positive human rights obligation: The appeals judgment in Urgenda v the Netherlands, in: Wessel/Werner/Boutin (eds.), Netherlands Yearbook of International Law 2018, T.M.C. Asser Press, 2019. 7 See Leijten, Human rights v. Insufficient climate action: The Urgenda case, Netherlands Quarterly of Human Rights (2019), 37(2), 112‐118.

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3. The Supreme Court decision As we already stated, the Supreme Court upheld the ruling of the Court of Appeal. Therefore, the order that the District Court issued to the State and that was confirmed by the Court of Appeal, directing the State to reduce greenhouse gases by the end of 2020 by at least 25 % compared with 1990, stands as a final order. In summary, the Supreme Court ruled as follows.8 The European Convention on the Protection of Human Rights and Fundamental Freedoms (ECHR) requires the states that are parties to the convention to protect the rights and freedoms established in the convention for their inhabitants. Article 2 ECHR protects the right to life, and Article 8 ECHR protects the right to respect for private and family life. According to the case law of the European Court of Human Rights (ECtHR), a contracting state is obliged by these provisions to take suitable measures if a real and immediate risk to people’s lives or welfare exists and the state is aware of that risk. The obligation to take suitable measures also applies when it comes to environmental hazards that threaten large groups or the population as a whole, even if the hazards will only materialise over the long term. While Articles 2 and 8 ECHR are not permitted to result in an impossible or disproportionate burden being imposed on a state, those provisions do oblige the state to take measures that are actually suitable to avert the imminent hazard as much as reasonably possible. Pursuant to Article 13 ECHR, national law must offer an effective legal remedy against a violation or imminent violation of the rights that are safeguarded by the ECHR. This means that the national courts must be able to provide effective legal protection. The risk of dangerous climate change is global in nature: greenhouse gases are emitted not just from Dutch territory, but around the world. The consequences of those emissions are also experienced around the world. The Netherlands is a party to the United Nations Framework Convention on Climate Change (UNFCCC). The objective of that convention is to keep the concentration of greenhouse gases in the atmosphere to a level at which a disruption of the climate system through human action can be prevented. The UNFCCC is based on the premise that all member countries must take measures to prevent climate change, in accordance with their specific responsibilities and options. Each country is thus responsible for its own share. That means that a country cannot evade its own share of the responsibility to take measures by arguing that compared to the rest of the world, its own emissions are relatively limited in scope and that a reduction of its own emissions would have very little impact on a global scale. The State is therefore obliged to reduce greenhouse gas emissions from its territory in proportion to its share of the responsibility. This obligation of the State to do ‘its part’ is based on Articles 2 and 8 ECHR, because there is a grave risk that dangerous climate change will occur that will endanger the lives and welfare of many people in the Netherlands. When giving substance to the positive obligations imposed on the State pursuant to Articles 2 and 8 ECHR, one must take into account broadly supported scientific insights and internationally accepted standards. Important documents in this respect include the reports from the IPCC. The IPCC is a scientific body and intergovernmental organisation that was set up in the context of the United Nations to handle climatological studies and developments. The IPCC’s 2007 report contained a scenario in which the warming of the earth could reasonably be expected to be limited to a maximum of 2oC. 8 This summary is derived from the summary of the English translation. It does not supersede the grounds for the judgment itself and does not fully reflect the Supreme Court’s opinion.

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In order to achieve this target, the Annex I countries (these being the developed countries, including the Netherlands) would have to reduce their emissions in 2020 by 25‐40 %, and in 2050 by 80‐95 %, compared with 1990. At the annual climate conferences held in the context of the UNFCCC since 2007, virtually every country has regularly pointed out the necessity of acting in accordance with the scenario of the IPCC and achieving a 25‐40 % reduction of greenhouse gas emissions in 2020. The scientifically supported necessity of reducing emissions by 30 % in 2020 compared with 1990 has been expressed on multiple occasions by and in the EU. In addition, since 2007, a broadly supported insight has arisen that, to be safe, the warming of the earth must remain limited to 1.5oC, rather than 2oC. The Paris Agreement of 2015, therefore, expressly states that the states must strive to limit warming to 1.5oC. That will require an even greater emissions reduction than was previously assumed. All in all, there is a great degree of consensus on the urgent necessity for the Annex I countries to reduce greenhouse gas emissions by at least 25‐40 % in 2020. The consensus on this target must be taken into consideration when interpreting and applying Articles 2 and 8 ECHR. The urgent necessity for a reduction of 25‐40 % in 2020 also applies to the Netherlands on an individual basis. The State and Urgenda are both of the opinion that it is necessary to limit the concentration of greenhouse gases in the atmosphere in order to achieve either the 2oC target or the 1.5oC target. Their views differ, however, with regard to the speed at which greenhouse gas emissions must be reduced. Until 2011, the State’s policy was aimed at achieving an emissions reduction in 2020 of 30 % compared with 1990. According to the State, that was necessary to stay on a credible pathway to keep the 2oC target within reach. After 2011, however, the State’s reduction target for 2020 was lowered from a 30 % reduction by the Netherlands to a 20 % reduction in an EU context. After the reduction in 2020, the State intends to accelerate the reduction to 49 % in 2030 and to 95 % in 2050. Those targets for 2030 and 2050 have since been laid down in the Climate Act. The State has not explained, however, that – and why – a reduction of just 20 % in 2020 is considered responsible in an EU context, in contrast to the 25‐40 % reduction in 2020, which is internationally broadly supported and is considered necessary. There is a broad consensus within climate science and the international community that the longer reduction measures to achieve the envisaged final target are postponed, the more comprehensive and more expensive they will become. Furthermore, postponement creates a greater risk of an abrupt climate change occurring as the result of a tipping point being reached. In light of that generally endorsed insight, it was up to the State to explain that the proposed acceleration of the reduction after 2020 would be feasible and sufficiently effective to meet the targets for 2030 and 2050, and thus to keep the 2oC target and the 1.5oC target within reach. The State did not do this, however. The Court of Appeal was thus entitled to rule that the State must comply with the target, considered necessary by the international community, of a reduction by at least 25 % in 2020. The State has asserted that it is not for the courts to undertake the political considerations necessary for a decision on the reduction of greenhouse gas emissions. In the Dutch system of government, the decision-making on greenhouse gas emissions belongs to the government and Parliament. They have a large degree of discretion to make the political considerations that are necessary in this regard. It is up to the courts to decide whether, in taking their decisions, the government and Parliament have 368

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remained within the limits of the law by which they are bound. Those limits ensue from the ECHR, among other things. The Dutch Constitution requires the Dutch courts to apply the provisions of this convention, and they must do so in accordance with the ECtHR’s interpretation of these provisions. This mandate to the courts to offer legal protection, even against the government, is an essential component of a democratic state under the rule of law. The Court of Appeal’s judgment is consistent with the foregoing, as the Court of 27 Appeal held that the State’s policy regarding greenhouse gas reduction is obviously not meeting the requirements pursuant to Articles 2 and 8 ECHR to take suitable measures to protect the residents of the Netherlands from dangerous climate change. In addition, the order that the Court of Appeal issued to the State was limited to the lower limit (25 %) of the internationally endorsed, minimum necessary reduction of 25‐40 % in 2020. The order that was issued leaves it up to the State to determine which specific 28 measures it will take to comply with that order. If legislative measures are required to achieve such compliance, it is up to the State to determine which specific legislation is desirable and necessary. The Supreme Court concluded that the order that the District Court issued to the 29 State and that was confirmed by the Court of Appeal, directing the State to reduce greenhouse gases by the end of 2020 by at least 25 % compared with 1990, will be allowed to stand. Pursuant to Articles 2 and 8 ECHR, the Court of Appeal can and may conclude that the State is obliged to achieve that reduction, due to the risk of dangerous climate change that could have a severe impact on the lives and welfare of the residents of the Netherlands.

4. Analysis and critique What strikes the eye immediately is the extent to which the judgment weaves strands 30 of international politics, science and national politics into one fabric.9 Referring to the ruling of the Court of Appeal, the Supreme Court considered that there was “a real threat of dangerous climate change, resulting in the serious risk that the current generation of citizens will be confronted with loss of life and/or a disruption of family life”. This makes it clearly plausible that the current generation of Dutch nationals will have to deal with the adverse effects of climate change in their lifetime. The State of the Netherlands had not raised an appeal against these considerations. Thus, the severity of the threat was an established fact in the proceedings. Making a thorough analysis of ECtHR case law, the Supreme Court concluded that the State is obliged, on the basis of Articles 2 and 8 ECHR, to take appropriate measures to avert this threat, if it were a problem of national dimensions only. The Supreme Court went on to conclude from a multitude of treaties, conventions and international agreements that intervention is called for. This way, following a detour through Articles 2 and 8 ECHR, political, non-binding 31 declarations and statements have been elevated to the status of binding legal norms. This is remarkable. Generally, a clear distinction is made between binding legal norms and legally non-binding and unenforceable political statements. It is a fact that the emissions reduction at issue – of at least 25 % by the end of 2020 – has not been laid down in a binding legal norm, either internationally or at EU or even domestic level. Nevertheless, the Supreme Court has concluded that there is a legally binding obligation 9 The analysis and critique are partially based upon the note of Backes/Van der Veen, AB 2020/24 (see supra fn. 4).

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to reduce greenhouse gas emissions by at least 25 % because – succinctly put – this is the only possible way for the Netherlands to contribute to the reduction globally needed to avert the “real and immediate risk” of severe harm to the public health and serious environmental damage. So it appears that Articles 2 and 8 ECHR have in some way managed to level out the distinction between legally binding obligations and (widely supported) international policy statements. A fundamental step. The necessity of cutting emissions by “at least 25 %” stems from science. In this way, one could argue that the, almost, communis opinio among scientists worldwide is elevated to the status of binding legal norm, again following a detour through Articles 2 and 8 ECHR. The Supreme Court did not accept that the State’s climate policy is considered irresponsible by the science community. The decision space of the State ends where the right to life and the right to private and family life are under considerable threat and where the measures necessary to avert this threat are not taken. Thus, the results of scientific research, having gained broad acceptance, also gain legal momentum and effect. If scientific insights imply that an emissions cut of at least 25 % is an absolute necessity and this target has found its way into many international documents, the question remains what this target means for the Netherlands. The Supreme Court reproves the Dutch State for failing to pursue a consistent reduction policy and for lowering its reduction targets without any substantiation. According to the Supreme Court, the State failed to explain how the Netherlands would be able to contribute its fair share to the bare minimum climate scientists believe to be necessary, if it sets its reduction targets at below 25 % in 2020. Throughout the proceedings, the Dutch State argued that it can and aims to achieve its contribution to the necessary emissions reduction by setting a different reduction curve. Evidently, the Supreme Court held this argument to be insufficiently substantiated. The Supreme Court conspicuously reminded the State of earlier policy decisions. In particular, the State decided to endorse the 25‐40 % reduction targets in 2020 in order for its policy to remain credible and to communicate this policy in express terms. Later policy decisions included the formulation of even higher reduction targets for later years. The Dutch State failed to substantiate its subsequent argument that it can and aimed to achieve its contribution to the necessary emissions reduction by setting a different reduction curve, which would make its decision to depart from its earlier 25‐ 40 % reduction targets for 2020 a responsible one. The Supreme Court again forges a strong link between law and politics, for it reverses the State’s arguments on credibility: it is not credible to change course without good reason, which is therefore not allowed. A sound drubbing for the State, which is censured by the Supreme Court for wavering from one political choice to the other. Flip-flopping in politics is far from unusual. Judicial intervention in political vacillating, on the other hand, is not “business as usual”. So why did the Supreme Court intervene here? Quite possibly, the reason stems from a rather unique combination of the eminent importance of the issue with a background in human rights, the extent to which the earlier statement enjoys the court’s approval, the discrepancy between that earlier statement and subsequent policy choices, and the question whether this discrepancy still has a credible explanation. The next important question is to what extent the Courts entered the domain that is the legislator’s prerogative. After all, if the order is to be considered an order to create legislation, it might constitute an inroad on the judicial tasks of the judiciary. This applies likewise to the violation of human rights referred to by the Supreme Court. Several options were available to the State to comply with the judicial orders. Nonetheless, it tends to be necessary to introduce legislation to force society to reduce 370

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emissions. In the appellate proceedings, the State had failed to make a sufficiently plausible argument that the only useful action would be to create legislation. In that case, the choice to create legislation after all amounts to nothing but the legislator’s own choice rather than an obligation on the part of the State as a consequence of the order contained in the ruling. It follows that this interpretation does not imply the judiciary’s infringing on the legislator’s domain. Another striking aspect of the Urgenda case is the fact that the Dutch Supreme Court 36 did not request an advisory opinion of the European Court of Human Rights and the Fundamental Freedoms on the basis of Art. 1(3) of Protocol 16 to the Convention. This Protocol entered into force in August 2018 and extends the jurisdiction of the European Court to include advisory jurisdiction for States that have ratified Protocol 16, like the Netherlands. A State court may request an advisory opinion. It must provide reasons for its request, provide the relevant legal and factual background of the case and the request must be about a case that is currently pending. The aim is to give the domestic courts guidance on interpretation of the relevant provisions of the Convention that relate to the case before it. As the Urgenda case raised issues concerning human rights and climate change that were never subjected to the jurisdiction of the ECtHR and the Dutch Supreme Court has always ruled that the Dutch legal system will not allow for a broader interpretation of human rights than the ECtHR would allow, requesting an advisory opinion could have provided valuable and relevant guidance on the interpretation of the positive obligations under Article 2 and 8 ECHR. On the other hand, requesting such an opinion is not mandatory and the answer is not binding. Also, the procedures for the request and the advisory opinion itself are time-consuming. As the parties in the Urgenda case were very keen to have the Supreme Court deliver judgment before 2020, it was probably in the best interest of the parties that the court did not request the advisory opinion. However, the availability of such an advisory opinion could have been very helpful in future climate litigation as climate cases in many countries are and will be based on human rights, more specifically Articles 2 and 8 of the ECHR. The final question raised by the Urgenda decision is what effect it will have on future 37 climate policy and other cases under judges’ hammers, like the Friends of the Earth vs Shell case. The Supreme Court has explicitly noted the exceptional nature of the threats posed by the projected temperature rise. There may be similar exceptional situations. At the same time, courts have shown reluctance accepting the state’s liability in connection with the damage from earthquakes caused by the extraction of natural gas from fields in the north of the Netherlands. That, too, is an exceptional situation. In that particular case, the Supreme Court held that it was up to the lower courts to examine whether the Dutch State knew or should have known that there was a real risk that the human rights protected under Articles 2, 3 and 8 ECHR would be violated and, if so, whether the Dutch State failed to take measures which, judged reasonably and with due observance of all circumstances, might have been expected to avoid that risk. Factors to consider in this respect are that the State has a wide degree of discretion in all these positive obligations, that this positive obligation may not impose an impossible or disproportionate burden on the State, and that the State must strike a fair balance between the interests of individual citizens and those of the community at large.10 For these and other reasons, it remains to be seen whether the Urgenda decision will give rise to more successful cases relying on Articles 2 and 8 ECHR.

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III. Other developments in the Netherlands 38

There have been several developments in the Netherlands that are either influenced or linked to the Urgenda case and the Dutch efforts to mitigate climate change. In this section, we discuss the idea of climate litigation against large corporations in the Netherlands, the efforts of the Dutch legislator to introduce a dedicated Climate Act in the Netherlands and the accomplishments of the Dutch administration to forge a Climate Agreement between many societal partners in order to come up with measures that will ensure sufficient emissions reduction by 2030.

1. Friends of the Earth versus Shell Based on the success of the Urgenda case, Friends of the Earth Netherlands, several other Dutch non-governmental organisations and a large number of concerned citizens instigated a civil law suit against Shell on 5 April 2019. In their 235‐page summons, the plaintiffs argue that Shell should stop causing climate change. According to Friends of the Earth, Shell is the largest contributor to climate change in the Netherlands since Shell is responsible worldwide for the production of two times more greenhouse gases than all of the people in the Netherlands combined and the company has been aware of the dangerous consequences of greenhouse gas emissions for a long time. The lawsuit against Shell is based in tort law. The court is asked to order Shell to change its company policy to accelerate its reduction of greenhouse gas emissions sooner than planned and to stop all such emissions by 2050. 40 Although Friends of the Earth has summoned a company instead of a State, the legal basis for the claim in the Shell case is the same as in the Urgenda case. The plaintiffs rely on both the duty of care as a tort of negligent endangerment and on the horizontal effects of human rights. The essence of the claim is the following. When all countries in the world agree, on the basis of the best available science, that a global warming of 2 °C is to be considered a very large and all-encompassing danger for humanity and this danger is imminent because the parties that have a substantial degree of influence on that danger knowingly refuse to make their proportionate contribution to the prevention of that danger, these parties – bearing in mind, among other things, the so-called ‘basement hatch judgment’ of the Supreme Court11 – are in violation of the unwritten standard of due care of Section 6:162 of the Dutch Civil Code. The ‘basement hatch judgment’ had been relevant in the ruling by the District Court of The Hague in the Urgenda case. It provides several relevant factors to assess the scope of the duty of care in cases of negligent endangerment: (1) the nature and extent of climate change damage; (2) the foreseeability of such damage; (3) the chance that hazardous climate change will occur; (4) the nature of the acts or omissions of the State; and (5) the onerousness of taking precautionary measures. The plaintiffs are of the opinion that Shell is guilty of hazardous negligence because of its climate policy, or the lack thereof, and could therefore be ordered to do more. Also, the plaintiffs argue that the duty of care owed by Shell towards the people in the Netherlands and future generations can be further 39

11 See Basement Hatch Ruling, Dutch Supreme Court (5 November 1965) ECLI:NL:HR:1965:AB7079. This famous ruling is concerned with an opened basement hatch in a bar and the factors relevant for the unwritten duty to warn about the dangers. See De Graaf/Jans, Liability of Public Authorities in Cases of Non-Enforcement of Environmental Standards, (2007) 24 Pace Env L Rev 377. The main difference with the Urgenda and the Shell case is that the court has to deal with a hazardous global development, in relation to which it is uncertain when, where and to what extent exactly this hazard will materialize.

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interpreted by looking at the Paris Agreement and human rights codified in Articles 2 and 8 of the ECHR, also when taking into account the precautionary principle. According to Friends of the Earth et al., the opinion of the Court of Appeal in the 41 Urgenda case that insufficient emissions reduction by the State is a violation of the duty of care that the State has to protect the right to life and an undisturbed family life, with the State also being bound by the precautionary principle as part of the ECHR, also has consequences for Shell’s duty of care. Since Shell is a large corporation and is responsible for two times the greenhouse gas emissions that the Netherlands produces, its power over individuals is commensurate with the State’ power. Furthermore, Friends of the Earth argues that Shell has committed to relevant international agreements in order to mitigate climate change. In light of these arguments, the duty of care for Shell must be deemed to be as significant as that of the Netherlands. On the other hand, private actors cannot normally be held directly accountable for human rights violations before international human rights courts and it is not common for Dutch domestic courts to directly apply international human rights treaties in relations between private actors. The fact that the Urgenda case involves a claim against the State and the Friends of the Earth case involves a claim against a private actor is therefore highly relevant from a legal perspective. Friends of the Earth argues that it can rely on the indirect horizontal effect of human rights treaty provisions, which means that human rights are used to interpret private law open legal norms in a dispute between private actors. The case is ongoing. There has no judgment yet. Shell produced a legal reply on 42 12 November 2019. In a 272‐page legal document, Shell shows that it does not intend to meet the plaintiffs’ demands. As was the case with Urgenda’s claim, the merits of the case are up for debate and lawyers may not agree on the most likely outcome. We must probably wait for several years before the Supreme Court will have delivered its judgment in this case, if the parties bring the case before the Supreme Court, of course.

2. The Climate Act After a long run-up and several readings, the Dutch Climate Act finally entered into 43 force and effect on 1 September 2019. The Climate Act sets targets and provides for a number of instruments to ensure that these targets can be achieved. An important question in light of the above would be to what extent the targets set by the legislator can be enforced, in a court of law, for instance. a) Targets of the Climate Act. Section 2 of the Climate Act sets out the main 44 objective of the Act, which is to reduce greenhouse gas emission levels by 95 % by 2050 (compared with 1990). The Act provides ‘a framework for developing policy aimed at an irreversible and gradual reduction of Dutch greenhouse gas emissions’ by the aforesaid 95 %. It also sets two other targets. Pursuant to Section 2(2), the relevant ministers aim to 45 reduce the greenhouse gas emissions by 49 % by 2030 and to make energy production carbon-neutral and fully reliant on renewables by 2050. The purpose of these two targets is to make it easier to achieve the overarching objective. Strikingly, though, the 2030 target is nothing more than a goal to strive for; in fact, it is the only intermediate target in the Act. The ambition to have Dutch energy production fully carbon-neutral by 2050 is not beyond reproach either. For example, there is no obligation for Dutch energy consumption to be carbon-neutral. In addition, the Act allows for Carbon Capture and Storage by power plants, meaning that CO2 is produced after all. In summary, the Act establishes one key binding objective: the 95 % emissions 46 reduction by 2050. The other two aims are mere targets. Van der Veen/De Graaf

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b) Instruments provided by the Climate Act. Section 3 of the Act obliges the government to formulate, for the first time in 2019 and then every five years, a climate plan setting out the policy aimed at achieving the climate targets for the next 10 years. Section 3(2) lists some of the required elements of these climate plans. They include the measures to be taken in order to achieve the objectives of Section 2, the projected share of renewables, the projected primary energy consumption savings, the measures to be taken to stimulate the share of renewables and primary energy consumption savings, an analysis of the most recent scientific insights into climate change reduction, and a number of analyses of a different nature. 48 Pursuant to Section 4, the first climate plan was due to be adopted in 2019, after which it will be reviewed at least once every five years.12 Progress reports are scheduled to be delivered every two years after adoption and subsequent reviews. If so warranted by the reports in view of the objectives of the Act, measures will be taken. The first climate plan relates to the 2021‐2030 period. 49 The climate plan offers an important opportunity to frame the European and international obligations the Dutch State has to comply with. When drafting the climate plan, the legislator sought to align with the substance and procedures of the integrated National Energy and Climate Plan (NECP), which all EU Member States are required to prepare pursuant to EU Regulation on the Governance of the Energy Union.13 Each Member State’s NECP must set out action plans implementing the Energy Union’s energy and climate objectives. NECPs have time horizons of 10 years and may be updated after five years. Member States are required to submit progress reports every two years, which may give rise to policy adjustments, nationally and EU-wide. The first draft NECP relates to the 2021–2030 period, offering a glance towards 2040. The NECP cycle dovetails with the ambition cycle of the Paris Agreement, the signatories to which agreed to raise their ambition levels – also known as Nationally Determined Contributions, or NDCs – every five years. Translated to the Dutch situation, the climate plan will help define the terms of the NECP and the NDCs. The better part of the Climate Plan is likely to incorporate the agreements made as part of the Climate Agreement (Section 4). 50 The Act also provides for a climate and energy outlook. Once a year, the PBL Netherlands Environmental Assessment Agency (Planbureau voor de Leefomgeving) will present the responsible minister with a climate and energy outlook. A scientific report, this document charts the consequences of the climate policy conducted in the previous year. For that year, the outlook maps at least the greenhouse gas emissions, including a sector-by-sector overview, as well as the developments and measures impacting the emissions. The Planbureau voor de Leefomgeving is an autonomous research agency advising the Dutch government. Essentially, the idea is for this agency to map the past, but it is not entirely clear whether they are also expected to provide forward-looking analyses. It is likely that ‘the consequences of the climate policy conducted in the previous year’ include a calculation of the effects of said policy for a subsequent period and, more particularly, an assessment as to whether this policy moves us closer to or in fact away from achieving the objectives. The minister is obliged to present the outlook to Parliament in a policy document. This document will provide an overall picture of the realisation of the climate policy as set out in the climate plan, represent the key aspects of this realisation broken down by ministry, represent the 47

12 A draft climate plan on the basis of the Climate Act has been published online (https://www. rijksoverheid.nl/documenten/rapporten/2019/11/25/voorstel-voor-het-klimaatplan). 13 See Regulation (EU) 2018/1999 of the European Parliament and of the Council of 11 December 2018 on the Governance of the Energy Union and Climate Action.

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consequences of each ministry’s budget for climate policy, as well as the financial consequences for households, companies and government bodies resulting from significant climate policy developments that are not in line with the climate plan. The purpose of the climate policy document and the climate and energy outlook is to enable Parliament to check the executive’s implementation of its climate policy and demand changes to it if necessary. c) Targets of the Climate Act. It is obvious that the legislator does not want the 51 Climate Act to be enforceable in a court of law. This is illustrated by a quote from a 22 November 2018 memorandum to the Lower House of Parliament: “The difference between the 2050 objective and the 2030 target is relevant in that it determines the way in which Parliament can compel the government to adhere to the targets. Neither target constitutes an obligation that can be enforced in a court of law. The texts of the bill and the explanatory notes are so abundantly clear that the persons introducing the bill regard the odds of a court ruling differently to be low. This does not alter the fact that courts have their own responsibility to judge on the scope and substance of acts and treaties.”14 A similar text can be found in the Memorandum of Amendment of 27 June 2018: The target will be implemented according to the advice provided by the Council of State, as a policy objective with the aim of reducing legal liability. This stresses the policy’s aim of being a political mandate for the government rather than a limit value which can be enforced in a court of law.15 These two passages demonstrate that the legislator had the express aim of keeping the 52 courts out of the picture. It follows that the Climate Act is a purely political document. The explanatory memorandum thus explains that the hard binding target provides a clear signal to industry on the one hand but will not be legally enforceable in a court of law on the other. In other words, the target is meant to be binding on government, while accountability must be discussed in the political arena only, not in court. That leaves the legally relevant fact that according to the explanatory documents the Act does not preclude such legal actions as Urgenda. The Climate Act, it follows, leaves intact the option to bring legal action, in the sense that it does not include any provision ruling them out. Apart from that, the Climate Act establishes a policy framework, no more, no less. It is impossible to argue, therefore, that the legislator has drafted a watertight text regulating the reduction of greenhouse gas emissions and that the court would ‘consequently’ enter the legislator’s domain if – in the wake of the Hague District Court and Court of Appeal – it ordered the State to take measures. Then again, it is not difficult to imagine the State referring to the Climate Act in a 53 future action involving climate issues and invoking the legislative and administrative framework it introduced for the very purpose of tackling climate change and eliminating threats to human life. As a result, it might be that the options to hold the State liable are slightly more limited by the introduction of the Climate Act after all.

3. The Climate Agreement The Climate Agreement aims to commit the Dutch State and a multitude of interest 54 groups to climate objectives. It makes concrete the measures necessary to achieve one of the targets of the Climate Act. That target is the objective from Section 2 of the Climate 14 15

Parliamentary Papers, session year 2018–2019, 34 534, no. 13, 2. Parliamentary Papers, session year 2017–2018, 34 534, no. 10, 7.

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Act: reducing the country’s greenhouse gas emissions by 2030 by 49 % in comparison with 1990. 55 This being an agreement, there needs to be consensus ad idem, which has been reached. The negotiations were conducted at five ‘sector tables’, as they were called, representing the following five sectors: Industry, Electricity, Mobility, Built Environment and Agriculture. Each sector discussed possible measures and delivered a statement on how their sector would achieve the number of megatons of greenhouse gases emissions reduction necessary for that sector by 2030 in order to reach the joint 49 % reduction target. The measures presented and their consequences for greenhouse gas emissions are indicative. Consequently, the parties at the table only reached agreement on the basis of indicative figures. 56 The Climate Agreement provides for an immense number of – proposed – measures to be taken by the five sectors. Industry, for example, proposes the introduction of a CO2 tax for large companies. Large companies that are subject to the EU Emissions Trading System (EU ETS) will be charged a CO2 tax from 2021 if they emit CO2 in excess of the 2030 emission reduction goal. Furthermore, a limitation of carbon capture and storage (CCS) subsidies is anticipated. CCS subsidies will therefore be reduced to a maximum of 7.2 megatons of CO2 and will be subject to strict requirements. In addition, the energy tax on natural gas will go up. 57 To further illustrate the scope of the agreements, we will provide here a sample of agreements that might affect urban and regional planning. The spatial impact of proposed measures from the Climate Agreement, as far as classical spatial planning is concerned, will be enshrined in the environmental and spatial planning policy. Nonetheless, the developments within the Agriculture and Land Use sector – the green sector, which tends to fall outside the purview of urban and regional planning in the classical sense – require attention. When it comes to claiming space, Agriculture and Land Use and other ‘Built Environment’ themes are fierce competitors. The Climate Agreement also provides: “The parties have agreed as follows: The different, increasing and partly conflicting claims for green space arising from the climate and broader sustainability agenda are classified in the National Environmental Strategy (Nationale Omgevingsvisie, or NOVI) under the priority: Future-proof development of rural areas. Closer consideration of such claims and spatial planning will be integrated into regional and local area processes, including the RESes. As part of the NOVI Monitor, the Planbureau voor de Leefomgeving will issue periodic reports on the safeguarding of the national interests and priorities and monitor progress of the area-specific approach. The trend thus diagnosed may cause parties to confer on the implementation of certain – new – activities and instruments in order to safeguard collective and public interests.”16 58

The message that comes across from the Climate Agreement is that the objectives agreed upon need to be turned into other instruments, subject to consultation and perhaps parliamentary approval. It cannot be stressed enough that the Climate Agreement is an initial setting to frame policy for the purpose of implementing other legal instruments, which may have mandatory effect. They need not be so, but the possibility is expressly referenced. For example, the Climate Agreement provides for the dairy and feed sectors to make agreements on optimising feed in order to reduce methane emissions, one such agreement being to improve the feed conversion by developing feed that reduces methane emissions. It is noted in the text of the agreement that for 16

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Climate Agreement, 126–127. ‘RESes’ stands for Regional Energy Strategies.

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any wish to enforce collective measures a consideration must be made about the appropriateness of a covenant or whether in fact declaring agreements to be universally applicable may be a better option.17 The Climate Agreement is silent on its own enforceability. It states that the details 59 and implementation of the agreement will be entrusted to the participating parties, including central government, to the extent possible. In this way, the parties themselves will bear primary responsibility for the effective implementation of the Climate Agreement. Sector-specific implementing committees will be set up under the supervision of the relevant ministers. The Minister of Economic Affairs and Climate Policy will set up an overarching progress committee. The idea, it follows, is for the implementation of the agreements to remain in the 60 hands of the participating parties, who will bear responsibility for the effective execution of the Climate Agreement, with each sector being responsible for executing their own specific set of agreements.18 It is clear from the text of the Climate Agreement itself that it is but a first step, with many aspects still requiring consultation among the parties involved. If necessary, the government will wield a ‘big stick’ in the form of legislation. Neither the Climate Agreement nor the many measures announced can be enforced in law per se.

IV. Conclusions This chapter provides an overview of climate litigation in the Netherlands. The 61 Urgenda case is arguably the most famous climate case in the world since it was the first case in which a court of law, the District Court in The Hague on 24 June 2015, ordered a State to reduce CO2 emissions, specifically by 25 % by 2020 compared with 1990 emission levels. Although the Netherlands stated it would implement the ordered reduction and is still struggling to do so in the summer of 2020, it also appealed against the judgement. While the 2015 judgment was based on a violation of the duty of care owed towards all citizens and future generations by the State and rejected the possibility that Urgenda et al. could rely on human rights as a legal basis for the order, the Court of Appeal and the Supreme Court of the Netherlands had no problem ruling that the State has a positive obligation to do more against climate change on the basis of right to life and the right to respect private and family life. In this respect it is a remarkable case, for environmentalists as well as for lawyers. The Urgenda judgement has received attention worldwide as well as in the Dutch 62 political arena and in Dutch society. In a sense it has been a relevant catalyst for action against climate change both on a personal and on an institutional level. Not only has it been relevant for the adoption by Parliament of the Climate Act and the emergence and acceptance of the Climate Agreement, but it has also been a relevant starting point for further climate litigation, as evidenced by the newest form of climate litigation that was inspired by the Urgenda case. Whether the Friends of the Earth case against Shell will be successful in arguing before a court of law that large corporations should be held accountable for playing an appropriate role in mitigating climate change on the basis of a duty of care that is interpreted in light of relevant human rights, is a question that remains to be seen. 17 18

Climate Agreement, 130. Climate Agreement, 14.

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S. Climate change litigation in Germany* Bibliography: Ahrens, Außervertragliche Haftung wegen der Emission genehmigter Treibhausgase?, VersR 2019, 635; Althammer, Zivilprozessualer Rechtsschutz gegen grenzüberschreitende Umweltemissionen, in: Adolphsen/Goebel/Haas (eds.), Festschrift für Peter Gottwald zum 70. Geburtstag, C.H. Beck 2014, p. 9; Bamberger/Roth/Hau/Poseck (eds.), Beck‘scher Online-Kommentar, 52nd ed., C.H. Beck 2019; Bindoff/Stott/ AchutaRao/Allen/Gillet/Gutzler/Hansingo/Hegerl/Hu/Jain/Mokhov/Overland/Perlwitz/Sebbari/Zhang, Detection and Attribution of Climate Change: from Global to Regional, in: Stocker/Qin/Plattner/Tignor/ Allen/Boschung/Nauels/Xia/Bex/Midgle (eds.), IPCC 2013: Climate Change 2013: The Physical Science Basis. Contribution of Working Group I to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change, 2013, 869; Boscovic, in: JurisClasseur Environnement et Développement durable, fasc. 2030; Chatzinerantzis/Herz, Climate Change Litigation – Der Klimawandel im Spiegel des Haftungsrechts, NJOZ 2010, 594; Cias/Sabine/Bala/Bopp/Brovkin/Canadell/Chhabra/DeFries/Galloway/Heimann/Jones/Le Quéré/ Myneni/Piao/Thornto, Carbon and Other Biogeochemical Cycles, in: Stocker/Qin/Plattner/Tignor/Allen/ Boschung/Nauels/Xia/Bex/Midgle (eds.), IPCC 2013: Climate Change 2013: The Physical Science Basis. Contribution of Working Group I to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change, 2013, 486; Cubasch/Wuebbles/Chen/Facchini/Frame/Mahowald/Winther, Introduction, in: Stocker/ Qin/Plattner/Tignor/Allen/Boschung/Nauels/Xia/Bex/Midgle (eds.), IPCC 2013: Climate Change 2013: The Physical Science Basis. Contribution of Working Group I to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change, 2013, p. 119; Dicey/Morris/Collins, The Conflict of Laws, 15th ed., Sweet & Maxwell 2012; Dore/Vieno/Tang/Dragosits/Dosio/Weston/Sutton, Modelling the atmospheric transport and deposition of sulphur and nitrogen over the United Kingdom and assessment of the influence of SO2 emissions from international shipping, Atmospheric Environment 41 (2007), no. 11, 2355; Dörner, in: Saenger (ed.), Zivilprozessordnung, 8th ed., Nomos 2019; Dörner, in: Schulze (ed.), Bürgerliches Gesetzbuch, 10th ed., Nomos 2019; Duczek, Rom II-VO und Umweltschädigung – Ein Überblick, 8.12.2009, available at SSRN:https://ssrn.com/abstract=1520526; Fleischer/Danninger, Konzernhaftung für Menschenrechtsverletzungen, DB 2017, 2849; Frank, Climate Change Litigation – Klimawandel und haftungsrechtliche Risiken, NJOZ 2010, 2296; Frank, Klimahaftung und Kausalität, ZUR 2013, 23; Frank, Störerhaftung für Klimaschäden?, NVwZ 2017, 664; Frank, Klimawandel – (auch) juristisch keine Blackbox, NVwZ 2018, 960; Gsell/ Krüger/Lorenz/Reymann (eds.), beck-online.GROSSKOMMENTAR Zivilrecht, C.H. Beck 2019; Hanschel, Climate Change and the Individual, in: Schmidt-Kessel (ed.), German National Reports on the 20th International Congress of Comparative Law, Mohr Siebeck 2018, p. 635; Hegerl/Zwiers, Use of models in detection and attribution of climate change, Wiley Interdisciplinary Reviews: Climate Change 2 (2011), 570; Houghton (ed.), Climate change 1995, the science of climate change: contribution of WGI to the second assessment report of the Intergovernmental Panel on Climate Change, IPCC 1996; Hüßtege/Mansel (eds.), NomosKommentar BGB, vol. 6, 3rd ed., Nomos 2019; Junker, Internationale Umwelthaftung der Betreiber von Energieanlagen nach der Rom II-Verordnung, in: Klees/Gent (eds.), Energie, Wirtschaft, Recht – Festschrift für Peter Salje, Heymann 2013, p. 243; Kadner Graziano, Das auf außervertragliche Schuldverhältnisse anzuwendende Recht nach Inkrafttreten der Rom II-VO, RabelsZ 73 (2009), 1; Kadner Graziano, The law applicable to cross-border damage to the environment, YbPIL 9 (2007), 71; Keeling, R.F./Keeling, C.D., Atmospheric Monthly In Situ CO2 Data – Mauna Loa Observatory, Hawaii, in: Scripps CO2 Program Data, UC San Diego Library Digital Collections 2017; Kötz/Wagner, Deliktsrecht, 13th ed., Vahlen 2016; Krajewski/Oehm/Saage-Maaß (eds.), Zivil- und strafrechtliche Unternehmensverantwortung für Menschenrechtsverletzungen, Springer 2018; Krajewski/Saage-Maaß (eds.), Die Durchsetzung menschenrechtlicher Sorgfaltspflichten von Unternehmen, Nomos 2018; Kropholler/v. Hein, Europäisches Zivilprozessrecht, 9th ed., Verlag Rechts und Wirtschaft 2011; Lehmann/Eichel, Globaler Klimawandel und Internationales Privatrecht, RabelsZ 83 (2019), 77; Lei/Yao/Bird/Yang/Zhai/Sheng, Coherent lake growth on the central Tibetan Plateau since the 1970s: Characterization and attribution, Journal of Hydrology 483 (2013), 61; Linke/Hau, Internationales Zivilverfahrensrecht, 7th ed., Otto Schmidt 2018; Mankowski, in: Magnus/Mankowski (eds.), European Commentaries on Private International Law, vol. 1, Otto Schmidt 2016; Mankowski, Ausgewählte * The first part of this article on the scientific bases of climate change and on the private international law questions will be published in German in Benicke/S. Huber (eds.), Festschrift Kronke, under the title “Klimaklagen gegen Unternehmen im Licht des IPR”, p. 601 et seq. The authors would like to thank Dr. Naomi Shulman for the translation of the article into English. Further thanks are due to Madeleine Petersen Weiner for her valuable comments on the manuscript.

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F., Global oceanic and land biotic carbon sinks from the Scripps atmospheric oxygen flask sampling network, Tellus B Chemical and Physical Meteorology 58 (2006) no. 2, 95; Mansel, Internationales Privatrecht de lege lata wie de lege ferenda und Menschenrechtsverantwortlichkeit deutscher Unternehmen, ZGR 2018, 439; Marzeion/ Cogley/Richter/Parkes, Attribution of global glacier mass loss to anthropogenic and natural causes, Science 345 (2014), no. 6199, 919; Mastrandrea/Field/Stocker/Edenhofer/Ebi/Frame/Held/Kriegler/Mach/ Matschoss/Plattner/Yohe/Zwiers, Guidance Note for Lead Authors of the IPCC Fifth Assessment Report on Consistent Treatment of Uncertainties, Intergovernmental Panel on Climate Change (IPCC) 2010, p. 4; Matthes, Umwelthaftung unter der Rom II-VO, GPR 2011, 146; Myhre/Shindell/Bréon/Collins/Fuglestvedt/ Huang/Koch/Lamarque/Lee/Mendoza/Nakajima/Robock/Stephen/Takemura/Zhang, Anthropogenic and Natural Radiative Forcing, in: Stocker/Qin/Plattner/Tignor/Allen/Boschung/Nauels/Xia/Bex/Midgle (eds.), IPCC 2013: Climate Change 2013: The Physical Science Basis. 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Part 4. Climate change litigation – National reports zeel, Modeling the Response of the Langtang Glacier and the Hintereisferner to a Changing Climate Since the Little Ice Age, Frontiers in Earth Science 7 (2019), 143; World Meteorological Organization (WMO), Guide to Climatological Practices, WMO-No. 100, 2018.

Contents I. Introduction ..................................................................................................... II. The scientific bases of climate change ....................................................... 1. The climate system..................................................................................... 2. Greenhouse effect and greenhouse gases .............................................. 3. Detection and attribution of climate change........................................ III. Climate change litigation and private international law........................ IV. International jurisdiction of national courts ............................................ 1. General forum, Art. 4 of Regulation No. 1215/2012 .......................... 2. Special forum of the tort, Art. 7 No. 2 of Regulation No. 1215/ 2012................................................................................................................ a) Place of act.............................................................................................. b) Place of effect ......................................................................................... 3. Special forum of the joinder of parties, Art. 8 No. 1 of Regulation No. 1215/2012 ............................................................................................. V. Applicable law.................................................................................................. 1. Scope of the tort statute ............................................................................ 2. Choice of law, Art. 14 Rome II ............................................................... 3. Environmental tort statute, Art. 7 Rome II.......................................... a) Substantive scope: “environmental damage” .................................. aa) Climate change as environmental damage in the sense of Art. 7 Rome II?............................................................................... bb) Personal or property damage caused “by way of the environment” .................................................................................. b) Link to place of effect (first alternative) .......................................... aa) Proviso of foreseeability analogous to art. 5 (1) 2nd subclause Rome II.......................................................................... bb) Loosening the link to place of effect with the data theory (Art. 17 Rome II) ........................................................................... c) Link to place of act (second alternative) ......................................... 4. Interim result............................................................................................... VI. Liability under German law.......................................................................... 1. Compensation for already occurred damages...................................... a) Environmental liability law................................................................. b) General tort law (Sec. 823 (1) BGB)................................................. c) Claims of sacrifice ................................................................................. 2. Protection from future impairments...................................................... 3. Proof of causality as central hurdle of private climate actions ........ VII. Summary...........................................................................................................

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I. Introduction 1

In climate change litigation, actions in a vertical relation (citizen – state) are differentiated from those in a horizontal relation (private – private). The primary issues in a vertical relation are public-law disputes before the administrative courts and particularly positive fundamental rights, which the individual demands from the state.1 1 Cf currently, the action from 25.10.2018 before the administrative court of Berlin, brought by Greenpeace and several private persons against the federal government and demanding compliance with climate goals until 2020, available at https://www.greenpeace.de/presse/publikationen/klageschrift-klimaklage (last consulted on 27.6.2019). On this area of climate change litigation as well as on the NGO

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By contrast, the following contribution concentrates on the so-called private enforcement of climate change litigation, that is to say on legal actions brought by private parties against other private parties (typically: companies). Thus, the central question is: Are private CO2 emitters liable for the effects of global climate change? In a case well-covered by the media, the Higher Regional Court Hamm addresses this 2 question in proceedings against the German energy company RWE.2 A Peruvian farmer claims that RWE produced 0.47 % of worldwide historical CO2 emissions in the period 1751‐20103 and is thus jointly responsible for climate change. He demands proportional compensation for expenses to protect his property from the imminent danger of flooding from a nearby glacial lake, whose water level has risen as a result of global warming.4 It is not the first time that a German civil court must deal with the consequences of 3 industrial plant emissions. Already in 1987, in its famous “forest damage decision” (Waldschadensurteil), the German Federal Court of Justice (Bundesgerichtshof, BGH) was supposed to decide whether the owner of a forestry and agricultural company was entitled to compensation claims because of damage to his trees.5 The applicant had claimed that the damages could be traced back to air pollution from harmful emissions, as part of the “dying forests” in Germany at that time.6 However, the defendants were not the (private) operators of the emitting plants but rather the Federal Republic of Germany and the state of Baden-Württemberg, which had authorized the plants. The RWE case is different: for the first time, a civil court has to deal with a private company’s responsibility for the effects of climate change.7 Following human rights litigation,8 models of private enforcement have recently 4 supplemented the public regulatory structures of climate liability law before the civil courts. Different motivations can underlie the decision to bring a civil action against private parties: those concerned by the consequences of climate change wish to eliminate harm inflicted on their property and other rights by the perpetrators of climate change, in other words to assert possible defensive rights and claims for damages.9 As in human rights litigation, non-governmental organizations often support these climate suits.10 Among other things, these organizations aim to draw the attention of the public, energy producers, and politics to climate change and its negative effects by Urgenda’s successful action against the Netherlands and its applicability to Germany, among others Saurer/Purnhagen, ZUR 2016, 16 et seq.; Voland, NVwZ 2019, 114 et seq.; Wegener, ZUR 2019, 3 et seq. 2 OLG Hamm, decision of 30.11.2017 – I-5 U 15/17, ZUR 2018, 118. 3 The industrial revolution marks the beginning of a strong increase in the use of fossil fuels and emission of fossil carbon dioxide. This is why one compares the preindustrial and industrial carbon dioxide levels to determine the increase in the (anthropogenic) emission of carbon dioxide. The terms preindustrial and industrial refer, somewhat arbitrary, to the periods before and after 1750, cf Planton, in: IPCC 2013. 4 OLG Hamm, decision of 30.11.2017 – I-5 U 15/17, ZUR 2018, 118. 5 BGH, judgment of 10.12.1987 – III ZR 220/86, BGHZ 102, 350, JZ 1988, 458 with note Medicus. 6 BGH, judgment of 10.12.1987 – III ZR 220/86, BGHZ 102, 350, JZ 1988, 458 with note Medicus. 7 Hanschel, in: Schmidt-Kessel (ed.), German National Reports on the 20th International Congress of Comparative Law, 2018, 635 (650). 8 On this issue, in German scholarship among others Weller/Kaller/Schulz, AcP 216 (2016), 387 et seq.; Weller/Thomale, ZGR 2017, 509 et seq.; Wagner, RabelsZ 80 (2016), 717 et seq.; Thomale/Hübner, JZ 2017, 385 et seq.; Fleischer/Danninger, DB 2017, 2849 et seq.; Krajewski/Oehm/Saage-Maaß (eds.), Zivilund strafrechtliche Unternehmensverantwortung für Menschenrechtsverletzungen, 2018; Krajewski/SaageMaaß (eds.), Die Durchsetzung menschenrechtlicher Sorgfaltspflichten von Unternehmen, 2018. 9 The action of the Peruvian farmer against RWE is based on the interference/disturbance liability [Störerhaftung] pursuant to § 1004 BGB, OLG Hamm, decision from 30.11.2017 – I-5 U 15/17, ZUR 2018, 118. 10 The claimant in the RWE‐case is supported by German Watch, see https://germanwatch.org/de/derfall-huaraz (last consulted on 1.7.2019).

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means of an individual case (strategic litigation).11 What is more, this attempt to guide others’ behaviour12 can aid private enforcement in serving climate protection itself.13

II. The scientific bases of climate change 1. The climate system The term climate designates the average state of the atmosphere in an area over a longer time period. This state is described by physical parameters, such as surface temperature, air pressure, amount of precipitation, or wind velocity. Statistical measures such as the mean and variance of these parameters are calculated over an extended time period, usually 30 years, in order to characterize climate.14 To put it simply, one can thus refer to climate as average weather.15 6 The areas of the Earth that are influenced by climate and that influence it in turn are referred to as the climate system. It consists of the atmosphere (the gaseous layer surrounding the planet), the hydrosphere (all liquid water), the lithosphere (the outermost layer of the planet), the cryosphere (all frozen water), and the biosphere (all ecosystems). If a long-term change of mean values and/or of the variance of climate parameters occurs – that is, one lasting at least ten years –, then one speaks of “climate change.”16 7 A central factor in describing the climate system is the energy budget, which includes all energy inputs as well as energy outputs to the surrounding universe.17 By far the greatest energy input is solar radiation that reaches the Earth. Approximately 30 % of this radiation is reflected back into space from surfaces such as clouds and ice. A further 20 % of solar radiation is absorbed in the atmosphere and the remaining 50 % by Earth’s surface.18 In the climate system, energy is present in different forms (e.g., as kinetic energy in the wind or as photosynthetically generated chemical energy) and is transported through the system in these forms (for instance through the movement of warm water, such as in the Gulf Stream). Energy output from the climate system to space occurs through heat emission from Earth’s surface and the atmosphere. 8 Changes in the energy budget result if the energy balance of the Earth is not equal globally. This balance refers to the difference between the energy entering the climate system and the energy radiated out to space.19 If this difference is positive, the climate system absorbs more energy than it emits, which raises the total energy budget in various forms of energy. This leads to changes in the system for as long as it takes to reach a (new) balance. Because of the complexity of the climate system and its internal processes, this reaction to changes is generally not linear and typically affects all parts of the system. 5

11 Cf the ECCHR’s definition of strategic litigation: “Strategic litigation aims to bring about broad societal changes beyond the scope of the individual case at hand. (…) Successful strategic litigation brings about lasting political, economic or social changes and develops the existing law. (…),” available at https://www.ecchr.eu/en/glossary/strategic-litigation/ (last consulted on 1.7.2019). 12 Lehmann/Eichel, RabelsZ 83 (2019), 77 (81). 13 On private enforcement of environmental protection through the conflict of laws Huber, in: Budzikiewicz/Weller/Wurmnest (eds.), BeckOGK, status 1.3.2019, art. 7 Rome II, mn. 6 et seq.; see also mn. 52. 14 World Meteorological Organization (WMO), Guide to Climatological Practices, WMO-No. 100, 2018. 15 Planton, in: Stocker/Qin/Plattner/Tignor/Allen/Boschung/Nauels/Xia/Bex/Midgle (eds.), IPCC 2013: Climate Change 2013: The Physical Science Basis. Contribution of Working Group I to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change, 2013. 16 Planton, in: IPCC 2013. 17 Planton, in: IPCC 2013. 18 Trenberth/Fasullo/Kiehl, Bulletin of the American Meteorological Society 90 (2009), no. 3, 311‐324. 19 Planton, in: IPCC 2013.

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2. Greenhouse effect and greenhouse gases The atmosphere and its composition play a central role in the climate system’s energy balance. To a large extent, gas molecules, clouds, or aerosol particles in the atmosphere absorb the heat radiation from Earth’s surface, which therefore does not reach space directly.20 The atmosphere becomes transparent for thermal radiation only above a certain altitude. Since the atmospheric temperature at this altitude is lower than that of the Earth’s surface and temperature determines the amount of energy that matter emits, there is less energy emitted from this atmospheric layer than from Earth’s surface. The resulting energy budget leads to higher surface temperatures, among other things. This atmospheric influence is called the greenhouse effect, and the gases, which can absorb the Earth’s thermal radiation, are accordingly termed greenhouse gases. Water vapour (H2O), carbon dioxide (CO2), and methane (CH4) rank among the most important naturally occurring greenhouse gases. This natural greenhouse effect is an important prerequisite for life on Earth, since the average surface temperature on an Earth without atmosphere and greenhouse gases would be approximately -18°C.21 If the concentration of greenhouse gases in the atmosphere rises, then the altitude level above which the atmosphere is transparent for thermal radiation rises. Because the atmospheric temperature decreases with altitude, the total amount of radiated energy decreases. If all other parameters remain the same, this leads to a positive energy balance of the climate system, which increases the energy budget and causes the climate to change. Anthropogenic activities on Earth can change the energy balance of the climate system in various ways. The influences can be divided into those that affect the amount of energy absorbed and those that change the emission of energy. The former mainly results from an alteration of the reflectivity of Earth’s surface, called “albedo”, through land use change22 or through increased particle concentrations linked to the emission of environmental pollutants, which, depending on their optical characteristics, can both have a shadowing (cooling) effect or absorb additional energy.23 The increases of the atmospheric concentrations of greenhouse gases from anthropogenic sources cause the amount of emitted energy to change. CO2 has the greatest impact here.24 Its increase in the atmosphere since the beginning of the intense use of fossil fuels is very well documented by reconstructions from various climate archives, such as ice cores, and, since 1958, by direct measurements.25 Atmospheric CO2 concentrations by now are the highest in the past 800,000 years. What is more, this concentration is currently rising with the greatest speed in 20,000 years. Compared to the benchmark year 1750, the CO2 concentration has increased by about 40 %.26 This 20 Cubasch/Wuebbles/Chen/Facchini/Frame/Mahowald/Winther, in: Stocker/Qin/Plattner/Tignor/Allen/Boschung/Nauels/Xia/Bex/Midgle (eds.), IPCC 2013: Climate Change 2013: The Physical Science Basis. Contribution of Working Group I to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change, 2013, 119‐158. 21 Roedel/Wagner, Physik unserer Umwelt: Die Atmosphäre, 2017, ch. 1, 44. 22 Myhre/Shindell/Bréon/Collins/Fuglestvedt/Huang/Koch/Lamarque/Lee/Mendoza/Nakajima/Robock/ Stephen/Takemura/Zhang, in: Stocker/Qin/Plattner/Tignor/Allen/Boschung/Nauels/Xia/Bex/Midgle (eds.), IPCC 2013: Climate Change 2013: The Physical Science Basis. Contribution of Working Group I to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change, 2013, 661. 23 Twomey, Atmospheric Environment 41 (2007), 120‐125. 24 Myhre et al., in: IPCC 2013, 661. 25 Keeling R.F./Keeling C.D., Atmospheric Monthly In Situ CO2 Data – Mauna Loa Observatory, Hawaii, in: Scripps CO2 Program Data, 2017. 26 Cias/Sabine/Bala/Bopp/Brovkin/Canadell/Chhabra/DeFries/Galloway/Heimann/Jones/Le Quéré/Myneni/Piao/Thornto, Carbon and Other Biogeochemical Cycles, in Stocker et al. (ed.), Climate Change 2013: The Physical Science Basis, 2013, 465‐570.

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rise can be attributed to anthropogenic sources both on the basis of the amounts of fossil fuels used (bottom-up) and of analyses of the molecules’ physical characteristics (top-down)27 and can thus be separated from the natural carbon cycle. According to the last Assessment Report from 2013 by the Intergovernmental Panel on Climate Change (IPCC)28, the concentrations of CO2 and other greenhouse gases additionally present in the atmosphere due to these emissions are very likely29 the reason for the climate change that has already been observed.30 The burning of fossil fuels, which contributes 66 % to cumulative emissions since 1750, as well as changed land use (for instance through deforestation), which contributes 32 % of the CO2 released, constitute the main sources of anthropogenic CO2.31 In this, the source of the individual CO2 molecules is irrelevant to the effect of CO2 concentrations on the Earth’s energy balance. The influence on the global energy balance results from the total concentration of CO2 both from natural and from anthropogenic sources, with the additional anthropogenic CO2 constituting one of the main reasons for the currently unequal energy balance. What decides the long-term effect of the CO2 amount additionally released by anthropogenic activities is how long it remains in the atmosphere. Since CO2 in the atmosphere is a very stable molecule, and many natural removal processes only act on long timescales, it takes a very long time for the anthropogenic contribution to the carbon cycle to disappear. Based on current analyses, between 15–40 % of anthropogenic CO2 will remain in the atmosphere in 1,000 years.32 This fact and the typical mixing times of the atmosphere of approx. 1.3 years33 also demonstrate that the place of an individual CO2 molecule’s emission has no influence on its effect in the climate system either (in contrast to other atmospheric pollutants, such as for instance sulphur dioxide, whose effect, e.g., in “acid rain”, is mostly local or regional, due to a shorter atmospheric life time).34 Taking into consideration all anthropogenic influencing factors on Earth’s climate, in its Assessment Report the IPCC reaches the conclusion that humanity’s overall impact leads to a positive energy balance, meaning that the Earth absorbs additional energy, 27

Manning/Keeling R. F., Tellus B Chemical and Physical Meteorology 58, 2006, no. 2, 95‐116. IPCC – Intergovernmental Panel on Climate Change. This organization was created in 1998 by the United Nations Environment Programme (UNEP) and the World Meteorological Organization (WMO) to determine the current state of climate change as well as to assess its possible ecological and socioeconomic consequences. 29 The IPCC Assessment Report expresses quantitative statements of uncertainty about findings probabilistically, using the following terms: virtually certain 99–100 % probability, very likely 90–100 %, likely 66–100 %, about as likely as not 33–66 %, unlikely 0–33 %, very unlikely 0–10 %, exceptionally unlikely 0–1 %. Additional expressions used: extremely likely 95–100 %, more likely than not > 50–100 % and extremely unlikely 0–5 %; Mastrandrea/Field/Stocker/Edenhofer/Ebi/Frame/Held/Kriegler/Mach/Matschoss/ Plattner/Yohe/Zwiers, Guidance Note for Lead Authors of the IPCC Fifth Assessment Report on Consistent Treatment of Uncertainties, Intergovernmental Panel on Climate Change (IPCC) 2010, 4 et seq. 30 Bindoff/Stott/AchutaRao/Allen/Gillet/Gutzler/Hansingo/Hegerl/Hu/Jain/Mokhov/Overland/Perlwitz/ Sebbari/Zhang, in: Stocker/Qin/Plattner/Tignor/Allen/Boschung/Nauels/Xia/Bex/Midgle (eds.), IPCC 2013: Climate Change 2013: The Physical Science Basis. Contribution of Working Group I to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change, 2013, 869. 31 Cias/Sabine/Bala/Bopp/Brovkin/Canadell/Chhabra/DeFries/Galloway/Heimann/Jones/Le Quéré/Myneni/Piao/Thornto, in: Stocker/Qin/Plattner/Tignor/Allen/Boschung/Nauels/Xia/Bex/Midgle (eds.), IPCC 2013: Climate Change 2013: The Physical Science Basis. Contribution of Working Group I to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change, 2013, 486. 32 Ibid., 472. 33 Patra/Takigawa/Dutton/Uhse/Ishijima/Lintner/Miyazaki/Elkins, Atmospheric Chemistry and Physics 9 (2009), no. 4, 1209‐1225. 34 Dore/Vieno/Tang/Dragosits/Dosio/Weston/Sutton, Atmospheric Environment 41 (2007), no. 11, 2355‐2367. 28

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which changes the climate. CO2 emissions have the greatest impact here,35 and the emissions of all greenhouse gases are very likely36 responsible for more than half of the observed increase in global mean surface temperature from 1951 until 2010.37

3. Detection and attribution of climate change Quantifying the effects of a certain deviation from an intact energy balance on the different compartments of the climate system and their state variables is very demanding. That is due to the climate system’s complexity and in particular due to the diverse feedback mechanisms that can increase or weaken the impact of the energy imbalance. For instance, a higher atmospheric temperature, as the result of an increased CO2 concentration, leads to more water vapour in the atmosphere. Since water vapour is itself a greenhouse gas, it increases the radiative effect of CO2. To establish a causal relation between an influencing factor on the climate system’s energy balance, such as an increased CO2 concentration, and an observable parameter like the global mean surface temperature, it is first necessary to detect a statistically significant change of this parameter above and beyond its natural variability and then to prove a causal influence of the factor in question on the parameter.38 To causally attribute a significant change to a certain influencing factor, it is typically necessary to determine the relative influence of several causal factors and assign a statistical significance to them. This process involves applying a combination of statistical analyses and physical knowledge about the climate system.39 Since – unlike in a lab experiment – individual factors cannot be suppressed when examining the climate system, the simulation of the physical processes in climate models often plays a central role in attribution studies.40 In these models, the dynamics of the climate system are simulated once with the factor in question (as well as all other relevant processes) and once without the factor (but still with all other relevant processes), and the results are compared to the changes observed in reality. Changes are identified as the causal result of an influencing factor, if the observations in reality correspond to the results of the entire climate model and if, at the same time, the model containing all factors save the one in question cannot explain the observed changes. Instead of comparing only numerical values, temporal and spatial “fingerprints” of different influencing factors are used to attribute an effect to an influencing factor. The relative influence of different factors may then be determined by combining the different fingerprints established by the climate model to achieve the best possible agreement between the model variables and the observations. The scaling factors of the individual processes thus make it possible to quantify the influence in question. For large-scale changes, e.g. of the global mean surface temperature, it appears that a relatively simple, linear combination of the different scaling factors is appropriate.41 According to the IPCC Assessment Report, greenhouse gases are likely42 responsible for an increase of 0.5 to 1.3°C in the global, median surface temperature between 1951 35

Myhre et al., in: IPCC 2013, 661. Cf fn. 29. 37 Bindoff et al., in: IPCC 2013, 869. 38 Bindoff et al., in: IPCC 2013, 874 et seq. 39 Bindoff et al., in: IPCC 2013, 872 et seq. 40 Hegerl/Zwiers, Wiley Interdisciplinary Reviews: Climate Change 2 (2011), no. 4, 570‐591. 41 Bindoff et al., in: IPCC 2013, 874. 42 Cf fn. 29. 36

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and 2010, and it is virtually certain43 that the internal variability of the climate system alone cannot explain the observed warming. Also, the influence of anthropogenic activities on the observed rise in the mean sea level was determined to be very likely44. For regional phenomena and other climate variables, such as precipitation rates which, firstly, are difficult to simulate explicitly with models or for which, secondly, there is not sufficient observational data to allow a comparison with model results, attribution requires a multi-step process. Therefore, the first step is attributing a large-scale change, such as surface temperature, and then the next (physically or statistically based) modelling step involves determining the resulting effects on the target variable.45 This approach can make it more difficult to separate different influencing factors. Attribution studies at the regional or even the local level, such as with the melting of the particular glacier in the Peru-RWE case outlined above, still involve considerable uncertainties, also because the internal variability of a system on this scale is significantly larger. Globally, according to the IPCC, anthropogenic influence has likely46 contributed to glacial retreat since the 1960s.47 For some glaciers, it could be shown that their internal variability cannot explain the observed loss of ice mass.48 A study that includes all glaciers worldwide also shows that the contribution of all anthropogenic influencing factors on glacier mass loss has risen from -6 % ± 35 % in the time period from 1851‐70 to 69 % ± 24 % from 1991‐2010.49 For a number of glaciers, the contribution of anthropogenic climate change to melting was quantified and identified as the main impact.50 The contribution of glacial melt water to the rise of levels in glacier lakes has also already been quantified for several glaciers.51 The IPCC’s second Assessment Report in 199552 already used attribution research, which since then has established itself as an own subfield of climate science. In the most recent past, there has been considerable progress in this field particularly in attributing individual (extreme) weather events to climate change.53 Nevertheless, a scientific study of the causality between an anthropogenic influencing factor on the global climate system and a change that it causes in one part of this system will always result in a probabilistic statement,54 whose quantification relies on a combination of observations and climate modelling for the respective question.

III. Climate change litigation and private international law 27

The locally emitted greenhouse gases spread evenly throughout the entire atmosphere and by now affect the climate worldwide. Climate changes, in turn, can lead to 43

Cf fn. 29. Cf fn. 29. 45 Bindoff et al., in: IPCC 2013, 878. 46 Cf fn. 29. 47 Bindoff et al., in: IPCC 2013, 870. 48 Reichert/Bengtsson/Oerlemans, Journal of Climate 15 (2002), no. 21, 3069‐3081. 49 Marzeion/Cogley/Richter/Parkes, Science 345 (2014), no. 6199, 919‐921. 50 Wijngaard/Steiner/Kraaijenbrink/Klug/Adhikari/Banerjee/Pellicciotti/van Beek/Bierkens/Lutz/Immerzeel, Frontiers in Earth Science 7 (2019), 143. 51 Lei/Yao/Bird/Yang/Zhai/Sheng, Journal of Hydrology 483 (2013), 61‐67. 52 Houghton (ed.), Climate change 1995, the science of climate change: contribution of WGI to the second assessment report of the Intergovernmental Panel on Climate Change, 1996, ch. 8. 53 Otto, Annual Review of Environment and Resources 42 (2017), no. 1, 627‐646. 54 Cf fn. 29. 44

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individual damage potentially everywhere, for instance through (extreme) weather occurrences. From a legal perspective, this means that the place of conduct (place of the emitter) and the place of damage (place of injury of legal interests) do not usually coincide. Consequently, a climate action typically refers to several states.55 The RWE case involves Peru for one, where there is a risk of flooding because of the melting glacier, and Germany for another, where RWE has its seat and emits CO2 above all with its lignite-fuelled power stations. For affected parties, who want to bring an action against a private company before a German civil court, questions of private international law arise first, before responses to difficult material-legal questions, such as in particular the causality of an individual company’s emissions for a concrete damage (VI.)56: at the level of the claim’s admissibility, one must examine whether German courts have international jurisdiction (IV.). In the merits phase, the conflictof-laws rule must then establish the choice of law (V.).

IV. International jurisdiction of national courts 1. General forum, Art. 4 of Regulation No. 1215/2012 Those concerned by climate change effects can bring an action against companies 28 with a seat in Germany. Here, the domestic courts have international jurisdiction pursuant to art. 4 in conjunction with art. 63 of regulation no. 1215/2012. For this general international forum, it is irrelevant where the violation of legal interests that is the subject of the dispute occurred.57 The only decisive matter is that the statutory or administrative seat of the defendant, that is, the emitter, is on domestic territory.58 For the action against the energy supplier RWE, the RWE AG’s statutory and administrative seat in Essen gives German courts international jurisdiction.59 Before the background of the global effects of local greenhouse gas emissions, this 29 possibility for action, detached from the place of conduct and the place of damage, poses the risk that the defendant will be sued in an unforeseeable number of cases.60 However, the basic rule of art. 4 of regulation no. 1215/2012 is only supposed to protect the defendant from being sued before the court of a member state that he/she could not foresee.61 This is also guaranteed with climate actions, provided they are brought where the defendant is located. Furthermore, the possible disadvantage of many actions is balanced by the fact that the defendant can defend him-/herself more efficiently in his/ her country of residence, in his/her language, and in a legal and court system with which he/she is familiar.62 Thus, no restriction of the general forum is required, for

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Lehmann/Eichel, RabelsZ 83 (2019), 77 (80). On this issue already Lehmann/Eichel, RabelsZ 83 (2019), 77 et seq.; Weller/Nasse/Nasse, in: Benicke/S. Huber (eds.), Festschrift Kronke, p. 601 et seq. 57 Weller/Kaller/Schulz, AcP 216 (2016), 387 (392); Stürner, in: Hilbig-Lugani/Jakob/Mäsch (eds.), Festschrift Coester-Waltjen, 2015, 843 (844). 58 Pursuant to art. 63 (1) of regulation no. 1215/2012, to apply this order, companies and legal entities have their domicile at the place at which a) their statutory seat, b) their main administration, or c) their main branch is located. 59 Cf the statement of claim from 23.11.2015, 18, available at https://germanwatch.org/de/14198 (last consulted on 1.7.2019). 60 Lehmann/Eichel, RabelsZ 83 (2019), 77 (89). 61 Linke/Hau, Internationales Zivilverfahrensrecht, 7th ed., 2018, mn. 5.2; Stadler, in: Musielak/Voit (eds.), Zivilprozessordnung, 16th ed., 2019, art. 4 of regulation no. 1215/2012, mn. 1. 62 Dörner, in: Saenger (ed.), ZPO, 8th ed., 2019, art. 4 of regulation no. 1215/2012, mn. 1. 56

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instance by conditioning jurisdiction on causality.63 What is more, such a proviso of causality would shift one of the main issues in climate actions from the merits to jurisdiction.64

2. Special forum of the tort, Art. 7 No. 2 of Regulation No. 1215/2012 In addition to the general forum, the special forum of the “tort” according to art. 7 of regulation no. 1215/2012 could result in the jurisdiction of German courts. According to autonomous interpretation,65 the concept of the “tort” encompasses every behaviour of a defendant that entails a compensation liability and is not connected to a contract in the sense of art. 7 no. 1 of regulation no. 1215/2012.66 From this broad understanding, it follows that in addition to claims arising from fault liability and absolute liability, negatory claims are covered as well.67 In particular, those claims that serve to defend against harm of a property and are characterized in rem in national law (for ex. § 1004 BGB) also fall under art. 7 no. 2 of regulation no. 1215/2012.68 31 Art. 7 no. 2 of regulation no. 1215/2012 takes into account the place “at which the damaging event occurred or threatened to occur”.69 According to the “ubiquity principle”, which the ECJ developed concerning this reference point, the damaged party can choose whether to bring an action at the place of conduct or the place of damage.70 30

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a) Place of conduct. The place of conduct is the place of the occurrence that caused the damage, that is to say, in climate change actions in any event the place of the emission.71 If the place of emission coincides with the seat of the emitter, this does not entail any possibility of action for the damaged party that goes beyond the general forum.72 However, the place of conduct takes on an independent meaning if an emitter has his/her seat in another EU member state, while the emitting plant is located in 63

In greater detail on this issue Lehmann/Eichel, RabelsZ 83 (2019), 77 (89). Accordingly, on a causality requirement related to the jurisdiction of place of damage, see also Lehmann/Eichel, RabelsZ 83 (2019), 77 (91). On the jurisdiction of place of damage, see presently, mns. 34‐37. 65 Also fundamentally on the regulation no. 1215/2012 ECJ Case 189/87 Kalfelis v Schröder and others ECLI:EU:C:1988:459, mn. 16, with reference to the treaty’s systematics and objectives. 66 Cf most recently ECJ Case C-572/14 Austro-Mechana v Amazon ECLI:EU:C:2016:286, mn. 32 with further evidence. 67 Gottwald, in: Rauscher/Krüger (eds.), MüKoZPO, vol. 3, 5th ed., 2017, art. 7 of regulation no. 1215/ 2012, mns. 48 et seq. with numerous examples, including “claims arising from environmental damages”; Mankowski, in: Magnus/Mankowski, European Commentaries on Private International Law, vol. 1, 2016, mn. 248. 68 ECJ Case C-343/04 Land Oberösterreich v ČEZ ECLI:EU:C:2006:330, mn. 34; BGH, judgment of 24.10.2005 – II ZR 329/03, NJW 2006, 689; BGH, judgment of 18.7.2008 – V ZR 11/08, NJW 2008, 3502; Stadler, in: ZPO, art. 7 of regulation no. 1215/2012, mn. 17. The ECJ thus ruled out the exclusive jurisdiction for proceedings which have as their object “rights in rem in immovable property” (art. 24 no. 1 of regulation no. 1215/2012). It argued that in proceedings concerning transnational immissions, two properties of different states are affected, and there is no particular proximity to only one of the two states (ECJ, Land Oberösterreich/ČEZ (ibid.), mns. 34 et seq.). 69 In addition to international jurisdiction, art. 7 no. 2 also regulates local jurisdiction. This rules out a recourse to Sec. 12 et seq. Code of Civil Procedure, cf Gottwald, in: MüKoZPO, art. 7 of regulation no. 1215/2012, mn. 45; Stadler, in: ZPO, art. 7 of regulation no. 1215/2012, mn. 16. 70 ECJ Case 21/76 Handelskwekerij Bier v Mines de Potasse d’Alsace ECLI:EU:C1976:166, mns. 24, 25; ECJ Case C-360/12 Coty Germany v First Note Perfumes ECLI:EU:C:2014:1318, mn. 46 ; ECJ Case C-12/ 15 Universal Music v Michael Tétreault Schilling and others ECLI:EU:C:2016:449, mn. 28. For preventive actions for injunctions and declaratory actions, the expected place of damage is decisive, Gottwald, in: MüKoZPO, art. 7 of regulation no. 1215/2012, mn. 51. 71 Thus also Lehmann/Eichel, RabelsZ 83 (2019), 77 (90); Kropholler/v. Hein, Europäisches Zivilprozessrecht, 9th ed., 2011, art. 5 of regulation no. 1215/2012 old version, mn. 83 a. 72 Lehmann/Eichel, RabelsZ 83 (2019), 77 (90). 64

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Germany.73 Nevertheless, it must be taken into account that it can be difficult in practice to determine a single place of conduct. The power plants of large energy suppliers, such as the RWE AG, have various locations, often also in multiple countries.74 But the ECJ has denied mutual attribution of several participants’ places of conduct (accomplices, perpetrators, and accessories), also for example of the tortious acts of a parent company and its subsidiary companies.75 The various locations of a company’s emitting plants could be grouped into one place 33 of conduct, if one did not focus on the emission of greenhouse gases by various subsidiary companies but on the prior management decision by the parent company to put these plants into operation at their seat.76 b) Place of damage. In cases where both the defendant’s seat and his/her emitting 34 plants are located abroad, the place of damage nevertheless leads to German courts’ international jurisdiction, if legal assets were harmed domestically. One might recall, for instance, the crop losses many farmers suffered as a result of the heat and aridity in increasingly frequent “summers of the century.”77 The place of damage refers to the place where the plaintiff’s legal interests were harmed (place of injury of legal interest).78 Since in cases concerning damages from climate change effects, the place of conduct 35 and of damage generally diverge and the damage can manifest itself worldwide, it seems evident prima facie that these instances must be characterized as torts with dispersed losses.79 The ECJ’s “mosaic theory” applies to torts with dispersed losses.80 It states that the jurisdiction of the court seised at the place of damage is restricted to the harm that occurred in the forum state concerned, while all damages can be claimed at the place of conduct.81 Yet upon closer inspection, the situation differs from those 73 For emitters with a plant in Germany, whose seat is located in a third state, § 32 Code of Civil Procedure applies concerning local jurisdiction. It states that the court has jurisdiction “in the jurisdiction of which the tortious act was committed.” But the prevailing opinion interprets the regulation like art. 7 no. 2 of regulation no. 1215/2012, so that both the place of conduct and of damage establish jurisdiction, cf also Lehmann/Eichel, RabelsZ 83 (2019), 77 (90); Linke/Hau, IZVR, mn. 5.39 with further references. 74 For the most part, RWE’s power plants in Germany and the United Kingdom are run by 100 % subsidiary companies of the RWE AG, cf the statement of claims from 23.11.2015, 22; for an overview cf also https://www.group.rwe/der-konzern/organisationsstruktur (last consulted on 1.7.2019). This adds the (controversial) problem whether the harmful act of the subsidiary company can even be attributed to the parent company. Alternatively, it is possible to bring (joint) action against the subsidiary company at the seat of the parent company. Jurisdiction then arises from art. 8 no. 1 of regulation no. 1215/2012 (passive joinder of parties in the case of “anchor proceedings”) or, analogously, from § 23 Code of Civil Procedure, in greater detail Weller/Benz/Zimmermann, NZG 2019, 1121 et seq. 75 ECJ Case C-228/11 Melzer v MF Global UK Ltd ECLI:EU:C:2013:305, mn. 41, IPRax 2013, 555, with note von Hein IPRax 2013, 505; ECJ, Coty Germany/First Note Perfumes (fn. 66), mns. 50 et seq.; Linke/ Hau, IZVR, mn. 5.48. 76 In the RWE case, concerning the question of applicable law, the plaintiff argues that construction and operation of the power plants were based on the management decision of the RWE AG as parent company. The latter is therefore responsible for its subsidiary’s emissions, cf statement of claims of 23.11.2015, 23. On the applicability of the law of the place of conduct (s. o.), see mns. 59‐61. 77 This is the claim of the farmers personally affected by the hot summer, who are bringing action with Greenpeace against the federal government before the Administrative Court Berlin, demanding compliance with climate goals until 2020, cf https://act.greenpeace.de/klimaklage# (last consulted on 1.7.2019). 78 Gottwald, in: MüKoZPO, art. 7 of regulation no. 1215/2012, mn. 57; Stadler, in: ZPO, art. 7 of regulation no. 1215/2012, mn. 19. 79 Thus Lehmann/Eichel, RabelsZ 83 (2019), 77 (90). 80 On the mosaic theory ECJ Case C-68/93 Fiona Shevill and others v Presse Alliance ECLI:EU: C:1995:61, mn. 33; cf Wagner, RabelsZ 62 (1998), 243 (279 et seq.); according to prevailing opinion, the mosaic theory can be applied to torts with dispersed losses other than libel caused by press products, Paulus, in: Geimer/Schütze (eds.), Internationaler Rechtsverkehr, vol. 1, 52nd supplement, 2016, art. 7 of regulation no. 1215/2012, mn. 207; Stadler, in: ZPO, art. 7 of regulation no. 1215/2012, mn. 20 fn. 190. 81 ECJ, Fiona Shevill and others/Presse Alliance (fn. 76), mn. 33.

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involving privacy infringements by the press, on the basis of which the mosaic theory was developed: While press offenses harm one person in multiple states, greenhouse gas emissions can cause damage in any number of states for any number of different people.82 Just as therefore the mosaic analysis cannot be restricted in favour of a comprehensive jurisdiction at the place of the damaged party’s centre of interests in the case of internet press offenses,83 so the mosaic analysis as a whole should not to be applied here.84 The issue at hand is a “normal” offense committed elsewhere, in which the ubiquity principle applies without restrictions.85 This means that every damaged party can claim its full damages in the state of the place of conduct or of the place of damage. The latter presents an advantage for the damaged party, which can often bring an action at its place of residence, as the place where damage occurred. 36 The tort forum “should ensure legal certainty and avoid the possibility of the defendant being sued in a court of a Member State which he could not reasonably have foreseen” (recital 16 of regulation no. 1215/2012). The link to the place of damage is interpreted restrictively as a result: According to the ECJ’s jurisprudence, damages to those only harmed indirectly do not trigger jurisdiction at the place of damage.86 Following this reasoning, scholarship usually distinguishes between direct and indirect injuries of legal interest.87 According to this view, only the first injury of legal interest triggers jurisdiction at the place of damage, while mere consequential damages are irrelevant.88 Financial losses in particular, which result from initial damages that occurred elsewhere, count among such consequential damages.89 37 Following this restrictive interpretation, Lehmann/Eichel want to deny a jurisdiction of the place of damage for actions related to the effects of climate change90: For in their view, the personal and property damages claimed in climate change actions must be classified as mere indirect damages. These damages cannot be traced back directly to the conduct of the defendant but are instead mediated by global climate change and its effects.91 This view is not persuasive. It may be true that a complex chain of causality 82

Thus in substance also Lehmann/Eichel, RabelsZ 83 (2019), 77 (90 fn. 69). So Lehmann/Eichel, RabelsZ 83 (2019), 77 (90 fn. 69), who apply the mosaic analysis but consider only the restriction not applicable. 84 It is a dispersed damage only from the damaging party’s perspective, since a single act can have effects in multiple places. For torts with dispersed losses in the sense of the ECJ’s mosaic analysis, the injured party’s perspective is decisive, however. But whether several injured parties can claim their damages that occurred in different states (= mass damages) together in one place is not a question of mosaic analysis. Cf Leible, in: Rauscher (ed.), Europäisches Zivilprozess- und Kollisionsrecht, 4th ed., 2016, art. 7 of regulation no. 1215/2012, mn. 120 fn. 579; Schaub, JZ 2011, 13 (14, 17). 85 Leible, in: EuZPR/EuIPR, art. 7 of regulation no. 1215/2012, mn 119; Linke/Hau, IZVR, mns. 5.38 et seq. 86 ECJ, Case C-220/88 Dumez France and Tracoba v Hessische Landesbank and others ECLI:EU: C:1990:8, mns. 20 et seq.; ECJ Case C-350/14 Florin Lazar v Allianz SpA ECLI:EU:C:2015:802, mn. 25, 29; Dörner, in: ZPO, art. 7 of regulation no. 1215/2012, mn. 32. 87 Leible, in: EuZPR/EuIPR, art. 7 of regulation no. 1215/2012, mn. 122; Paulus, in: Internationaler Rechtsverkehr, art. 7 of regulation no. 1215/2012, mns. 198 et seq.; following recital 16 of regulation no. 1215/2012, others demand a proviso of foreseeability, cf OLG München, judgment of 17.6.1993–29 U 6063/92, NJW-RR 1994, 190; Gottwald, in: MüKoZPO, art. 7 of regulation no. 1215/2012, mn. 57; Schlosser, in: Schlosser/Hess (eds.), EU-Zivilprozessrecht, 4th ed., 2015, art. 7 of regulation no. 1215/2012, mn. 16 d. In greater detail on this issue, Lehmann/Eichel, RabelsZ 83 (2019), 77 (92). 88 Kropholler/v. Hein, EuZPR, art. 5 of regulation no. 1215/2012 old version, mn. 83 d; Leible, in: EuZPR/EuIPR, art. 7 of regulation no. 1215/2012, mn. 122. 89 ECJ Case 364/93 Antonio Marinari v Lloyds Bank and others ECLI:EU:C:1995:289, mn. 14, 20 et seq.; ECJ Case C-168/02 Rudolf Kronhofer v Marianne Maier and others ECLI:EU:C:2004:364, mn. 20; Kropholler/v. Hein, EuZPR, art. 5 of regulation no. 1215/2012 old version, mn. 87. 90 Lehmann/Eichel, RabelsZ 83 (2019), 77 (92). 91 Lehmann/Eichel, RabelsZ 83 (2019), 77 (92). 83

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underlies climate change actions.92 But the anthropogenically triggered change of the composition of greenhouse gases in the atmosphere is not an injury of legal interests in the sense of the tort forum. The atmosphere is not the place of damage of art. 7 no. 2 of regulation no. 1215/2012. It does not refer to the harm to general goods (air, water, etc.) but rather takes up the injury of a legal interest associated with an individual (property, life, health, etc.) Therefore, a tort forum for individual damages arising from the effects of climate change also exists at the place of damage.93

3. Special forum of the joinder of parties, Art. 8 No. 1 of Regulation No. 1215/2012 If domestic courts have international jurisdiction for an action against a greenhouse 38 gas emitter – for instance, a domestic company, such as the RWE AG – pursuant to art. 4, 63 of regulation no. 1215/2012, the question arises whether, beyond this, joint action can be brought at the seat of the parent company against a subsidiary company abroad.94 This could allow grouping together the emissions of several independent legal entities of one company group, which occur in different states. Pursuant to art. 8 no. 1 of regulation no. 1215/2012, there must be such a close 39 relationship between the actions “that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings” (requirement of coherence). The national court must review in the individual case whether this material connection between the anchor suit against a parent company and a further action against a subsidiary company actually exists.95 This was affirmed, for example, for the liability actions brought against a perpetrator and his/her accomplice.96 But the condition for such an anchor suit pursuant to art. 8 no. 1 of regulation no. 1215/ 2012 is always that the subsidiary company has its seat in another member state.97 Therefore, art. 8 para. 1 of regulation no. 1215/2012 is not applicable to third-state companies.98 Similarly, art. 8 para. 1 of regulation no. 1215/2012 does not allow the plaintiff to bring a class action, even though emission-induced climate change in particular may affect an unlimited number of potential plaintiffs.99

92

Supra mns. 17‐26. Another view in Lehmann/Eichel, RabelsZ 83 (2019), 77 (92). 94 On this consideration in the framework of human rights actions, cf Wagner, RabelsZ 80 (2016), 717 (732 et seq.); Stürner, in: Festschrift Coester-Waltjen, 843 (845 et seq.). 95 ECJ Case C-98/06 Freeport v Olle Arnoldsson ECLI:EU:C:2007:595, mn. 47; ECJ Case C-145/10 EvaMaria Painer v Standard Verlags GmbH and others ECLI:EU:C:2011:798, mn. 83; Stadler, in: ZPO, art. 8 of regulation no. 1215/2012, mn. 3. 96 BGH, decision of 30.11.2009 – II ZR 55/09 mn. 7 et seq., IPRax 2010, 533, with note Mock, IPRax 2010, 510. 97 ECJ Case C-645/11 Land Berlin v Ellen Mirjam Sapir and others ECLI:EU:C:2013:228, mn. 55; Paulus, in: Internationaler Rechtsverkehr, art. 8 of regulation no. 1215/2012, mn. 10; Leible, in: EuZPR/ EuIPR, art. 8 of regulation no. 1215/2012, mn. 9. 98 The German national civil procedure law, which, pursuant to art. 6 para. 1 of regulation no. 1215/ 2012, applies to defendants without location (of residence) in the sovereign territory of a member state, does not have a corresponding multi-party forum, cf Paulus, in: Internationaler Rechtsverkehr, art. 8 of regulation no. 1215/2012, mn. 19. 99 An analogy is not possible either, due to the narrow interpretation of art. 8 para. 1 of regulation no. 1215/2012, cf Althammer, in: Adolphsen/Goebel/Haas (eds.), Festschrift Gottwald, 2014, 9 (15 et seq.). For environmental law class actions – provided they exist –, Althammer proposes de lege ferenda an expansion of art. 8 para. 1 of regulation no. 1215/2012. 93

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V. Applicable law 40

If a German court has international jurisdiction, the first question that arises in the action’s merits phase concerns the substantive law that must be applied to the claims asserted according to the conflict of laws. Typically, climate change actions involve noncontractual obligations, meaning that the rules on conflict of laws of the Rome II regulation100 must be consulted.

1. Scope of the tort statute 41

The scope of the tort statute (art. 4, 7 Rome II) is determined by the regulation alone.101 Just as in regulation no. 1215/2012, the “torts” imply claims from tortious and strict liability.102 As the RWE case makes clear, claims to forbearance and removal against property immissions, for instance from Sec. 1004 BGB, are especially relevant to practice. These claims are not characterised as property law (art. 43 EGBGB) but as tort law.103

2. Choice of law, Art. 14 Rome II Pursuant to art. 14 Rome II, the parties can choose the law to be applied. In principle, the law can be chosen only after the event that establishes the damages has occurred (lit. a). A prior choice of law is only possible if all parties engage in commercial activities (lit. b). A choice of law could subordinate transnational mass damages to a single legal system, thus facilitating the claims settlement.104 43 It may seem doubtful that a defendant emitter would agree to the choice of a potentially stricter domestic environmental liability law. But if a domestic plant license existed, he/she could certainly have an interest in subordinating the legal dispute to the lex fori.105 42

3. Environmental tort statute, Art. 7 Rome II 44

Lacking a choice of law, the law applicable to torts must be determined objectively according to arts 4‐9 Rome II. Non-contractual obligations from environmental damages are regulated by art. 7 Rome II, which proceeds as lex specialis of the standard link of art. 4 Rome II.106 Pursuant to art. 7 Rome II, the law at the place of damage must be applied to claims from environmental damages because of the reference to art. 4 para. 1 Rome II, unless the damaged party unilaterally chooses the law at the place of the event that gives rise to 100 Regulation (EC) No. 864/2007 of the European Parliament and the Council on the law applicable to non-contractual obligations (“Rome II”) of 11.7.2007. Contractual claims are not typically considered in climate change actions. 101 Recital 11 cl. 1, 2 Rome II; Schmidt, in: Budzikiewicz/Weller/Wurmnest (eds.), BeckOGK, status 1.10.2019, art. 1 Rome II, mn. 18; Junker, in: Säcker/Rixecker/Oetker/Limperg (eds.), MüKoBGB, vol. 12, 7th ed., 2018, art. 4 Rome II, mn. 14 et seq. 102 Recital 11 cl. 3 Rome II; Junker, in: MüKoBGB, art. 4 Rome II, mn. 22. 103 Huber, in: BeckOGK, art. 7 Rome II, mn. 56 et seq.; Thorn, in: Palandt Bürgerliches Gesetzbuch, 78th ed., 2019, art. 7 Rome II, mn. 3. 104 Junker, in: Klees/Gent (eds.), Festschrift Salje, 2013, 243 (253). 105 Cf on possible motives for choosing the lex fori ECJ, Handelskwekerij Bier/Mines de Potasse d’Alsace (fn. 66); Junker, in: Festschrift Salje, 243 (253); Kadner Graziano, YbPIL 9 (2007) 71 (72). 106 Lehmann, in: Hüßtege/Mansel (eds.), NomosKommentar BGB, vol. 6, 3rd ed., 2019, art. 4 Rome II, mn. 12; Rühl, in: Budzikiewicz/Weller/Wurmnest (eds.), BeckOGK, status 1.12.2017, art. 4 Rome II, mn. 31.

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the damage (place of conduct). Because of the reference only to art. 4 para. 1 Rome II, the special links of art. 4 para. 2 and 3 Rome II do not apply in the area of environmental damages.107 a) Substantive scope: “environmental damage”. The substantive scope of art. 7 45 Rome II includes “non-contractual obligation[s] arising out of environmental damage” as well as claims due to personal or property damage resulting from environmental damage.108 Individual damages that are solely a consequence of environmental damage are thus explicitly noted as an independent damaging effect – unlike in regulation no. 1215/2012, which remains “silent” in this respect.109 aa) Climate change as environmental damage in the sense of Art. 7 Rome II? 46 However, individual damages as a result of climate change are only covered by the wording of art. 7 Rome II if one can assume that climate change caused by (among other things) greenhouse gas emissions is “environmental damage” in the sense of art. 7 Rome II. Recital 24 Rome II defines the concept of environmental damage110 as “adverse change in a natural resource, such as water, land or air, impairment of a function performed by that resource for the benefit of another natural resource or the public, or impairment of the variability among living organisms.” This is concretized in art. 2 no. 1 of the environmental liability directive (ELD), which – albeit not conclusively – lists various environmental damages.111 Since the greenhouse effect is initially a natural phenomenon, which also occurs 47 without the CO2 emissions of human beings,112 it may seem questionable whether mere emission and the resulting global warming already constitute environmental damage.113 Art. 2 no. 23 ELD defines damage as a detrimental change to the current state, resulting from human influence.114 Such a detrimental change is supposedly lacking in the case of noise violations in particular.115 In contrast to CO2 emission, where noise violations are concerned, it is already doubtful that a natural resource has undergone material change.116 By contrast, it is indisputable that CO2 emissions anthropogenically change the 48 composition of the atmosphere. The detriment of this change is more difficult to evaluate. Generally, one makes do with identifying an environmental damage by means of its immediate negative effects on other legally protected interests. Thus, for example, a change in the composition of a body of water is considered environmental damage (“water pollution”) if it damages health.117 The finding of health damages leads to the 107 Hohloch, in: Erman BGB, vol. 2, 15th ed., 2017, art. 7 Rome II, mn. 10; Huber, in: BeckOGK, art. 7 Rome II, mn. 54. 108 Dörner, in: Schulze (ed.), Bürgerliches Gesetzbuch, 10th ed., 2019, art. 7 Rome II, mn. 2; Matthes, GPR 2011, 146. 109 Cf Huber, in: BeckOGK, art. 7 Rome II, mn. 22. 110 The two terms are used synonymously, cf von Plehwe, in: Hüßtege/Mansel (eds.), NomosKommentar BGB, vol. 6, 3rd ed., 2019, art. 7 Rome II, mn. 7. 111 Directive 2004/35/CE of the European Parliament and the Council from April 21, 2004 on environmental liability with regard to the prevention and remedying of environmental damage. While Rome II refrains from referring to the Directive, the definition in Rome II nevertheless offers an aid for orientation, cf Matthes, GPR 2011, 146 (146 et seq.); Huber, in: BeckOGK, art. 7 Rome II, mns. 12 et seq. 112 See supra mn. 9. 113 Opposing, Lehmann/Eichel, RabelsZ 83 (2019), 77 (94). 114 von Plehwe, in: NomosKommentar BGB, art. 7 Rome II, mn. 7. 115 Cf Duczek, Rom II-VO und Umweltschädigung – Ein Überblick, 2009, 8 et seq.; Wendehorst, in: Säcker/Rixecker/Oetker/Limperg (eds.), MüKoBGB, vol. 12, 7th ed., 2018, art. 44 EGBGB, mn. 28. 116 Noise violations can constitute an environmental damage only exceptionally, e.g. if they harm the variability of the animal world, cf Spickhoff, in: Bamberger/Roth/Hau/Poseck (eds.), BeckOK BGB, 52nd ed., status 1.8.2019, art. 7 Rome II, mn. 3; Junker, in: MüKoBGB, art. 7 Rome II, mn. 14. 117 Wendehorst, in: MüKoBGB, art. 44 EGBGB, mn. 28; Huber, in: BeckOGK, art. 7 Rome II, mn. 18.

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conclusion that the natural resource (water) has been impaired in its function of benefitting the public, which consequently represents an environmental damage.118 49 The particular difficulty of climate change effects consists in the causal chain between emission and individual damage, which is extraordinarily long in contrast to “typical” environmental damages. This is why drawing an inference from the individual to the environmental damage that occurred in the case of the aforementioned “water pollution” is not similarly convincing. If one interpreted the wording of art. 7 Rome-II narrowly (“environmental damage or damage sustained by persons or property as a result of such damage”) and demanded that human beings cause directly detrimental change to a natural resource in order to affirm an environmental damage, one would have to deny such environmental damage in the case of mere CO2 emissions by human beings,119 since it does not directly cause the physical impacts of climate change.120 50 Such a narrow interpretation of the criterion of environmental damage is not convincing, however. Instead, the global warming as such that is caused by human CO2 emissions can be seen as environmental damage, linked to physical impacts following the scientific principles for detecting and attributing climate change outlined above.121 51 What is more, a parallel argument on the constellations of water pollution can corroborate this assumption: When climate change leads to the Peruvian glacier melting and the water level in the glacier lake rising, for example – as reported in the RWE case on the plaintiff’s side –, it endangers the natural habitat of human beings living below the lake. This also constitutes an impairment of a natural resource in its function of benefitting the public and to this extent an environmental damage. bb) Personal or property damage caused “by way of the environment”. Yet according to prevailing opinion, contrary to the wording of art. 7 Rome II (“from an environmental damage”), it suffices if the personal or property damage occurs “by way of the environment”, that is, through impact on a natural resource.122 According to this argument, the scope of art. 7 Rome II would also cover individual damages that result from a change in the atmosphere caused by emissions. 53 This is convincing: Such a broad understanding of the scope of art. 7 Rome II corresponds to the regulation’s telos.123 For one thing, the right to choose between the law of the place of damage and the law of the place of conduct benefits the damaged party.124 For another, the special link for environmental damages laid down in art. 7 Rome II serves precisely the substantive interests of the general public.125 It is supposed to guarantee a high level of environmental protection, which the EU declared a goal in the environmental domain, according to art. 191 para. 2 TFEU.126 The alternative link is intended to deter economic participants from directing emissions towards a neighbouring state in border areas, because they rely on a less strict regulation in the neighbouring 52

118

Wendehorst, in: MüKoBGB, art. 44 EGBGB, mn. 28. Cf Lehmann/Eichel, RabelsZ 83 (2019), 77 (94). 120 Supra mns. 11‐16. 121 Supra mns. 17‐26. 122 Hohloch, in: Erman BGB, art. 7 Rome II, mn. 2b, 7; Junker, in: MüKoBGB, art. 7 Rome II, mns. 11 et seq.; Thorn, in: Palandt, art. 7 Rome II, mn. 2; Wagner, IPRax 2008, 1 (9). 123 Lehmann/Eichel, RabelsZ 83 (2019), 77 (94). 124 On the favourability principle (Günstigkeitsprinzip) in art. 7 Rome II Wagner, IPRax 2008, 1 (9); Kadner Graziano, RabelsZ 73 (2009), 1 (45 et seq.). 125 According to the reasoning of the EU-Commission concerning the draft directive, art. 7 Rome II is supposed to contribute to an “improvement of environmental protection in general”, COM(2003) 427 final, 21 et seq.; Huber, in: BeckOGK, art. 7 Rome II, mn. 5. 126 Cf recital 25 Rome II; COM(2003) 427 final, 21. 119

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state.127 This effect of controlling behaviour can only be achieved if the damaged party’s right to vote is also provided in cases in which the individual damage is only based on an impact on a natural resource. Ultimately, the substantive scope of art. 7 Rome II for individual actions based on climate change is opened.128 The norm thus enables private enforcement by means of the conflict-of-laws regime129 and may be understood as part of political private international law.130 b) Link to place of damage (first alternative). The basic link for environmental 54 damages corresponds to the rule of the place of damage in art. 4 para. 1 Rome II. It says that in principle, the law of the state is applicable in which the damage occurs (place of the harm to legal interest), regardless of where the event causing the damage (place of conduct) or indirect consequences of the damage occurred.131 Since personal and property damages that arise from environmental damage constitute separate injurious effects, their place of damage must be determined separately.132 The place of damage for individual damages can therefore diverge from the place of environmental damage.133 In climate change actions, the place of damage can be located anywhere in the world, both regarding the environmental damage itself and possible individual damages.134 Foreseeability concerning the applicable environmental offense statute may suffer from this ubiquity. Nonetheless, according to the prevailing view, foreseeability is not an (unwritten) additional condition for applying the law at the place of damage.135 aa) Proviso of foreseeability analogous to art. 5 (1) 2nd subclause Rome II. Others 55 consider applying the proviso of foreseeability found in art. 5 (1) subclause 2 Rome II analogously to climate change actions, so as to protect the emitter.136 For claims arising from product liability, the directive refers to the liable party’s right of residence, if he/she “could not reasonably foresee” the product being placed on the market in one of the states named in art. 5 (1) lit. a) to c) Rome II. According to this argument, climate liability lacks the neighbouring position typical of transnational environmental damages, which allows the potential place of damage to be easily foreseen.137 Instead, the interest of climate liability is comparable to that of product liability, because there, too, it is not always verifiable where the product goes.138 The

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COM(2003) 427 final, 22. Similarly Lehmann/Eichel, RabelsZ 83 (2019), 77 (95). 129 Boscovic, in: JurisClasseur Environnement et Développement durable, fasc. 2030, mn. 47; Huber, in: BeckOGK, art. 7 Rome II, mn. 6; Mankowski, IPRax 2010, 389 (390). 130 On this Weller/Schulz, in: Basedow/Kieninger/Rühl (eds.), How European is European Private International Law?, 2019, 285 et seq. 131 Thorn, in: Palandt, art. 4 Rome II, mn. 1; von Plehwe, in: NomosKommentar BGB, art. 7 Rome II, mn. 17. 132 Hohloch, in: Erman BGB, art. 7 Rome II, mn. 10; Lehmann/Eichel, RabelsZ 83 (2019), 77 (96); Junker, in: MüKoBGB, art. 7 Rome II, mn. 20; dissenting view Duczek, Rom II-VO und Umweltschädigung, 14. 133 Junker, in: Festschrift Salje, 243 (254) with further references; dissenting view Spickhoff, in: BeckOK, art. 7 Rome II, mn. 3. 134 Lehmann/Eichel, RabelsZ 83 (2019), 77 (96). 135 According to Junker, in: MüKoBGB, art. 7 Rome II, mn. 20, this contradicts the sense and purpose of the reference; similarly Kadner Graziano, RabelsZ 73 (2009), 1 (45 et seq.); Thorn, in: Palandt, art. 7 Rome II, mn. 7; von Plehwe, in: NomosKommentar BGB, art. 7 Rome II, mn. 8; dissenting view Lehmann/ Eichel, RabelsZ 83 (2019), 77 (105 et seq.). 136 Lehmann/Eichel, RabelsZ 83 (2019), 77 (105 et seq.). 137 Lehmann/Eichel, RabelsZ 83 (2019), 77 (106). According to this argument, environmental liability law assumes that the place of damage is easily localizable, ibid. 138 Lehmann/Eichel, RabelsZ 83 (2019), 77 (106 et seq.). 128

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unintended regulatory gap results from the fact that climate change action was not yet foreseeable when Rome II was passed.139 56 With this approach, it is possible to take the particular interests of climate change actions into account. Methodologically, however, this seems to be less an analogy to art. 5 (1) subclause 2 Rome II than a teleological reduction of the link to the place of damage, following the proviso of foreseeability of art. 5 Rome II. For when the place of damage is not foreseeable, the law of the place of conduct must be applied instead – and not the law at the emitter’s usual residence.140 57 Moreover, it is doubtful whether the criterion of foreseeability is adapted to CO2 emissions and their possible consequences. This is especially doubtful when one considers that foreseeability does not exist when damages occur in an unplanned place, despite previous precautions.141 Such precautions to delimit the potential places of damage are simply not possible for CO2 emissions.142 On the contrary, an emitter must expect CO2 to spread evenly in the atmosphere, thus potentially causing damages globally. In this sense, the interests are more comparable to those of media offenses in the internet. There, the law of the place of damage is also applied regardless of whether the liable party could have foreseen the distribution.143 A mosaic analysis can mitigate the resulting global liability risk, if one damaged party suffers damages in multiple places.144 In this case, a mosaic analysis should be undertaken and the applicable law for the damage in question determined individually.145 58

bb) Loosening the link to place of damage with the data theory, Art. 17 Rome II. The protection-worthy trust of an emitter, whose emission of greenhouse gases is covered by a plant license at the place of conduct, can be taken into account at the level of substantive law146 by means of the datum theory.147 If (foreign) tort law is applied at the place of damage, then according to art. 17 Rome II, the safety and behavioural regulations of the place of conduct must be observed de facto and to the appropriate extent (method of cognizance). Since it concretizes such a rule of safety and conduct, art. 17 Rome II can also be applied to an official permit granted in an individual case.148 139

Lehmann/Eichel, RabelsZ 83 (2019), 77 (107). Ibid. 141 On foreseeability in art. 5 Rome II Müller, in: Budzikiewicz/Weller/Wurmnest (eds.), BeckOGK, status 1.10.2019, art. 5 Rome II, mns. 107 et seq. 142 Supra mns. 14‐15. 143 Junker, in: MüKoBGB, art. 40 EGBGB, mn. 77 with further references; Spickhoff, Bamberger/Roth/ Hau/Poseck (eds.), BeckOK BGB, 52nd ed., status 1.8.2019, art. 40 EGBGB, mn. 38; similarly Fornasier, in: Budzikiewicz/Weller/Wurmnest (eds.), BeckOGK, status 1.3.2018, art. 40 EGBGB, mns. 75 et seq., who denies restriction to the place of intended availability. 144 Spickhoff, in: BeckOK, art. 40 EGBGB, mn. 39; in detail on the (modified) mosaic analysis for internet offenses and on the divergent approaches by the ECJ and the BGH Fornasier, in: BeckOGK, art. 40 EGBGB, mns. 80 et seq. 145 Lehmann/Eichel, RabelsZ 83 (2019), 77 (97); Spickhoff, in: BeckOK, art. 7 Rome II, mn. 4; von Plehwe, in: NomosKommentar BGB, art. 7 Rome II, mn. 18; Hohloch, in: Erman BGB, art. 7 Rome II, mn. 10 emphasizes that this also applies in the case of multiple damaged parties (“tort with dispersed losses”). 146 Cf on this Huber, in: BeckOGK, art. 7 Rome II, mns. 62 et seq.; Junker, in: Festschrift Salje, 243 (255 et seq.); Lehmann/Eichel, RabelsZ 83 (2019), 77 (97 et seq.); Kadner Graziano, YbPIL 9 (2007) 71 (78 et seq.); Rüppell, Die Berücksichtigungsfähigkeit ausländischer Anlagengenehmigungen, 2012; Unberath/ Cziupka/Pabst, in: Rauscher (ed.), Europäisches Zivilprozess- und Kollisionsrecht, 4th ed., 2016, art. 7 Rome II, mns. 43 et seq. 147 In detail on conditions and legal consequences Weller, in: Gebauer/Mansel/Schulze (eds.), Liber Amicorum Jayme, 2019, 53 et seq. 148 Lehmann/Eichel, RabelsZ 83 (2019), 77 (98 et seq.); Rüppell, Die Berücksichtigungsfähigkeit ausländischer Anlagengenehmigungen, 2012, 169 et seq. 140

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But in order to achieve a just balance between tortfeasor and damaged party and to 59 avoid contradicting the ambitious goal of environmental protection pursued by art. 7 Rome II, consideration should be limited, according to the prevailing view.149 The permit is only supposed to be taken into account if (i) the emissions are permissible according to international law, (ii) the permit conditions abroad resemble those of the lex fori and (iii) the affected parties abroad were able to participate in the authorization procedure.150 c) Link to place of conduct (second alternative). It is unproblematic to consider 60 permits under public law, if the damaged party unilaterally chooses the law of the place of conduct according to art. 7 second alternative Rome II instead of the law of the place of damage.151 The place of conduct is the place where the cause that decides the injury of legal interest originated: For consequential damages from greenhouse gas emissions, this means the emitting plant’s location.152 It can be difficult to localize the place of conduct if an emitter runs several plants.153 61 In such cases, some scholars consider focusing on the action line154 or granting the damaged party a (further) right to choose between the individual places of conduct.155 Determining the place of conduct is also problematic when different legal entities in 62 corporate relationships variously contribute to the harmful event, so for instance in the case of parent and subsidiary companies.156 One could exclude preceding contributions to the harmful event (corporate management decisions of the parent) and focus on the last act that immediately caused the damage – in this case, the emission by the subsidiary company.157 But alternatively, one could also assume an independent place of conduct at the place of the parent company’s management decision, in other words at the place of its effective administrative headquarters.158 Where this issue is concerned, the discussion is still in its beginnings.159 149 Huber, in: BeckOGK, art. 7 Rome II, mn. 63; Junker, in: MüKoBGB, art. 7 Rome II, mn. 37; Thorn, in: Palandt, art. 7 Rome II, mn. 9; similarly Matthes, GPR 2011, 146 (151 et seq.), but without application of art. 17 Rome II. 150 Dutch and Austrian courts established these criteria, which, according to prevalent opinion, should be carried over to issues that come under Rome II, cf Rechtsbank Rotterdam, judgment of 16.12.1983, Ned. Jurispr. 1984, no. 341; OGH, judgment of 20.12.1988–2 Ob 656/87, BeckRS 16, 81203; Kadner Graziano, RabelsZ 73 (2009), 1 (50); Matthes, GPR 2011, 146 (151 et seq.); Thorn, in: Palandt, art. 7 Rome II, mn. 9; for consideration as data without application of art. 17 Rome II, among others von Plehwe, in: NomosKommentar BGB, art. 7 Rome II, mn. 23; for a solution for recognition with independent conditions Mankowski, IPRax 2010, 389 (391 et seq.). 151 While the permit is not applied on the basis of the damaged party’s choice according to art. 7 second alternative Rome II, it must be considered within the terms of the legal system’s unity, cf Hohloch, in: Erman BGB, art. 7 Rome II, mn. 16; Junker, in: MüKoBGB, art. 7 Rome II, mn. 32 with further references. This applies particularly if a German court must judge a case with a German place of conduct and a permit granted under German law, cf Junker, in: Festschrift Salje, 243 (257 et seq.). 152 Lehmann/Eichel, RabelsZ 83 (2019), 77 (96); Junker, in: MüKoBGB, art. 7 Rome II, mn. 22; Spickhoff, in: BeckOK, art. 7 Rome II, mn. 4. 153 See already mns. 32‐33. 154 An examination of the key issues takes place under art. 7 no. 2 of regulation no. 1215/2012, where the ubiquity principle applies as well. The “essential contributory conduct” is the focus, Leible, in: EuZPR/ EuIPR, art. 7 of regulation no. 1215/2012, mn. 135. 155 Huber, in: BeckOGK, art. 7 Rome II, mn. 38; skeptically Dicey/Morris/Collins, The Conflict of Laws, 15th ed., 2012, mn. 35‐070 fn. 359. 156 von Plehwe, in: NomosKommentar BGB, art. 7 Rome II, mn. 20. 157 Wagner, RabelsZ 80 (2016), 717 (743 et seq.). 158 Mansel, ZGR 2018, 439 (459 et seq.). 159 In the RWE‐case, the plaintiff claims that the construction and operation of the power plants was not based on the corporate subsidiaries’ decisions but rather on the sued parent company’s management decisions, cf statement of claim from 23.11.2015, 23.

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4. Interim result 63

If the parties of a private climate action did not choose a law (art. 14 Rome II), then the special regulation for environmental damages of art. 7 Rome II is applied without restrictions. The damaged party chooses whether the law at the place of damage (art. 7 1st alternative Rome II) or the law at the place of conduct (art. 7 2nd alternative Rome II) will be applied. Pursuant to art. 17 Rome II, substantive law can account for plant permissions under public law by means of the datum theory.

VI. Liability under German law 64

If German substantive law applies pursuant to the conflict of laws, the question arises what bases of claims for climate change effects can be activated against private operators of emitting plants. Since there is typically no contractual relationship between the plaintiff and the defendant, only non-contractual claims are possible. It is necessary to differentiate between claims intended to compensate already occurred damages (1.) and those that grant protection from future harm (2.).160 Proving the causal connection between the defendant’s emission and the damage or harm to the plaintiff constitutes the central problem of all eligible claims (3.).

1. Compensation for already occurred damages a) Environmental liability law. The compensation of individual damages arising from environmental harm is the subject of environmental liability law, a legal area at the intersection of public environmental law and private liability law.161 Special norms of environmental liability can be found inter alia in the environmental liability law (Umwelthaftungsgesetz – UmweltHG). Sec. 1 UmweltHG regulates plant owners’ liability for harm to body and health as well as for property damage to third parties that is caused by their plants’ environmental impact.162 66 Contrary to general tort law, liability according to Sec. 1 UmweltHG offers damaged parties the advantage of being a strict liability, so that neither unlawfulness nor fault are conditions for liability.163 Unlike in general tort law, the telos of liability is not an action’s unlawfulness or a breach of duty by the plant operator but rather the operating risk of the plant, which also exists with authorized normal usage.164 Accordingly, the claim addresses the owner of a plant listed in appendix 1 of UmweltHG, among them power plants and cogeneration plants, as operated by large-scale emitters of greenhouse gases like RWE.165 67 Pursuant to Sec. 1 UmweltHG, the injury of the claimant’s legal interest must have been caused by an environmental impact that originates from the claimee’s plant. As 65

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Pöttker, Klimahaftungsrecht, 2014, 62. Kohler, in: Staudinger BGB, rev. ed. 2017, intro. environmental liability law, mns. 2 et seq. 162 Mere assets as well as the environment as such are not protected, cf Kohler, in: Staudinger BGB, Sec. 1 UmweltHG, mn. 11; Nitsch, in: Spickhoff (ed.), BeckOGK, status 15.10.2019, Sec. 1 UmweltHG, mns. 27 et seq. 163 Kohler, in: Staudinger BGB, Sec. 1 UmweltHG, mn. 1; Rehbinder, in: Landmann/Rohmer (eds.), Umweltrecht, 89th supplement, February 2019, Sec. 1 UmweltHG, mn. 4. 164 Kohler, in: Staudinger BGB, Sec. 1 UmweltHG, mn. 1; Nitsch, in: BeckOGK, Sec. 1 UmweltHG, mn. 16. 165 Pöttker, Klimahaftungsrecht, 2014, 78. 161

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prescribed by Sec. 3 (1) UmweltHG, this is inter alia the case when the damage166 is caused by gases that have spread through the air. The emission of greenhouse gases like CO2 changes their concentration in the atmosphere. Consequently, this is an environmental impact in the sense of Sec. 3 (1) UmweltHG.167 Whether the individual injury of legal interest is also a result of this environmental impact is a question of causality, which is delineated in 3. If one assumes that climate change, caused among other things by anthropogenic 68 influences, and its effects are not a case of force majeure, then there is no reason to exclude liability in the sense of Sec. 4 UmweltHG.168 Sec. 1 UmweltHG therefore may be considered as a suitable basis of claims for a private 69 climate action, provided that the hurdle of the proof of causality can be overcome. b) General tort law, Sec. 823 (1) BGB. In addition to special norms like the 70 UmweltHG, the general tort law of Sec. 823 et seq. BGB is also part of environmental liability law.169 In the context of climate change litigation, it is possible to claim injuries of the absolute legal interests “property” and “health” in particular.170 According to prevailing opinion, ecological damages that do not manifest themselves in the injury of property or health do not fall under the protective scope of Sec. 823 (1) BGB and also not under the criterion “other law”.171 The impairment of pure property interests is not eligible for compensation under Sec. 823 (1) BGB either.172 The latter can be claimed under Sec. 826 BGB, but in the present cases, the necessary immorality and intent to damage is usually absent, since there is typically an operating license.173 Despite the causal relation between the injury of legal interests and emission, which is 71 difficult to establish, a claim according to Sec. 823 (1) BGB in actions against a private emitter of greenhouse gases could regularly fail in any event, due to lack of unlawfulness and fault.174 Because of the long causal chain between the greenhouse gas emissions and possible individual damages, climate actions are always a matter of indirect injuries of legal interests, which, according to prevailing opinion, require that a duty of care towards third parties was violated.175 Pursuant to inherited case law, anyone who creates a source of danger is “obligated to make the necessary and reasonable arrangements to prevent damage to others, as far as it is possible.”176 On the basis of this fundamental formula, the duty of care towards third parties under private law must in 166 Sec. 3 UmweltHG refers to “damage”, but this means the injury of a legal interest, which must be caused by way of the environment, cf Rehbinder, in: Umweltrecht, Sec. 3 UmweltHG, mn. 2; Kohler, in: Staudinger BGB, Sec. 3 UmweltHG, mn. 3. 167 Cf mns. 111‐16; Pöttker, Klimahaftungsrecht, 79; Rehbinder, in: Umweltrecht, Sec. 3 UmweltHG, mn. 8. 168 In detail on this issue Pöttker, Klimahaftungsrecht, 81 et seq. 169 Kohler, in: Staudinger BGB, intro. environmental liability law, mn. 57. 170 Chatzinerantzis/Herz, NJOZ 2010, 594 (595). 171 Pöttker, Klimahaftungsrecht, 65 et seq.; Wagner, in: Säcker/Rixecker/Oetker/Limperg (eds.), MüKoBGB, vol. 6, 7th ed., 2017, Sec. 823 BGB, mn. 884. 172 BGH, judgment of 22.4.1958 – VI ZR 65/57, BGHZ 27, 137, 140; Sprau, in: Palandt Bürgerliches Gesetzbuch, 78th ed., 2019, Sec. 823 BGB, mn. 2, 11; Wagner, in: MüKoBGB, Sec. 823 BGB, mn. 370. 173 Pöttker, Klimahaftungsrecht, 75 et seq. 174 Chatzinerantzis/Herz, NJOZ 2010, 594 (595). 175 Hager, in: Staudinger BGB, rev. ed., 2017, Sec. 823 BGB, mn. A 9; on the status of the dispute Wagner, in: MüKoBGB, Sec. 823 BGB, mns. 7 et seq. with further references. 176 BGH, judgment of 25.2.2014 – VI ZR 299/13, NJW 2014, 2104 (2105 mn. 8 with further references); Wagner, in: MüKoBGB, Sec. 823 BGB, mn. 403. Here, one could already doubt that a source of danger exists, since CO2 is a naturally occurring greenhouse gas, and the natural greenhouse effect is an important requirement for life on Earth (cf supra mn. 9). Only the CO2 concentration increased by human influences has negative effects, cf Wagner, in: MüKoBGB, Sec. 823 BGB, mn. 893.

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principle be defined independently of public-law regulations.177 Public-law operating permits and the compliance with emission limits do not exclude unlawfulness per se, but in individual cases, they can make the duty of care towards third parties under private law concrete from the perspective of the legal system’s unity.178 72 Opinions diverge on whether it is already sufficient to maintain certain limits concerning private plant operators’ duty of care towards third parties,179 or whether there is a duty of care to reduce emissions that exceeds the current limits (which, according to prevalent opinion, do not suffice to stop climate change) and the content of public-law permits.180 If one accepted the former as sufficient, there would be no unlawfulness in the absence of a violation of the duty of care towards third parties. The compliance with technical standards would then moreover eliminate fault in the absence of subjective objectionability of conduct; a claim arising from Sec. 823 (1) BGB would be impossible.181 But even if one affirmed a violation of the duty of care towards third parties, it would have to be possible to causally trace the injury of legal interest back to this breach of obligation.182 c) Claims of sacrifice. Last but not least, claims of sacrifice, which are granted to balance a duty to tolerate interference, are conceivable to compensate already suffered losses.183 Like strict liability, the eligible bases for claims under Sec. 906 para. 2 cl. 2 BGB and Sec. 14 cl. 2 BImSchG are independent of fault and grant compensation for impairments caused by the lawful normal operation of emitting plants.184 74 Yet their spatial scope does not apply in climate cases, according to prevailing opinion:185 As a central norm of private neighbour law, the protection of Sec. 906 (2) cl. 2 BGB is limited to the neighbourly domain.186 While Sec. 906 BGB does not refer to the concept of the neighbour, it focuses on the “local customary usage” of the property, thus suggesting a restriction predominantly to neighbour relations, or at any rate to a spatially delimited area.187 Individual damages caused by climate change are based on a global environmental process that acts across far distances between the place of emission and the place of impairment.188 Owners of properties situated far away can therefore not foresee the immission to the same extent as owners of a neighbouring property. An absence of interests comparable to those of neighbour relations eliminates an application (also analogously) of Sec. 906 BGB to climate liability cases.189 73

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Pöttker, Klimahaftungsrecht, 118 et seq. BGH, judgment of 18.9.1984 – VI ZR 223/82, BGHZ 92, 143, 151 et seq. (Kupolofen); Spindler, in: Spickhoff (ed.), BeckOGK, status 1.8.2019, Sec. 823 BGB, mns. 89 et seq., esp. 91; Kohler, in: Staudinger BGB, intro. environmental liability law, mns. 59 et seq. 179 Chatzinerantzis/Herz, NJOZ 2010, 594 (595). 180 Pöttker, Klimahaftungsrecht, 124 et seq. Dissenting Wagner, in: MüKoBGB, Sec. 823 BGB, mn. 893. In this view, the damaging effects of worldwide greenhouse gas emissions for the world climate are a global risk, which cannot be transformed into tortious duties of care of individual domestic operators of emission sources, ibid. 181 Chatzinerantzis/Herz, NJOZ 2010, 594 (595) with further references; Kohler, in: Staudinger BGB, intro. environmental liability law, mn. 243. 182 On this mns. 79‐84. 183 Pöttker, Klimahaftungsrecht, 85 et seq. 184 Kohler, in: Staudinger BGB, intro. environmental liability law, mn. 92. 185 Pöttker, Klimahaftungsrecht, 86 et seq. On the term “neighbouring relationship” in environmental liability law, Kohler, in: Staudinger BGB, intro. environmental liability law, mn. 11. 186 Kohler, in: Staudinger BGB, intro. environmental liability law, mn. 91; Klimke, in: Krüger (ed.), BeckOGK, status 1.2.2018, Sec. 906 BGB, mn. 2. 187 Pöttker, Klimahaftungsrecht, 88; Bassenge, in: Palandt Bürgerliches Gesetzbuch, 78th ed., 2019, Sec. 906 BGB, mn. 1; Roth, in: Staudinger BGB, rev. ed. 2016, Sec. 906 BGB, mn. 250. 188 Chatzinerantzis/Herz, NJOZ 2010, 594 (595), cf also supra mns. 14‐15. 189 Pöttker, Klimahaftungsrecht, 89; Chatzinerantzis/Herz, NJOZ 2010, 594 (595). For an analogous application of Sec. 906 para. 2 cl. 2 BGB Frank, NJOZ 2010, 2296 (2299 et seq.); Frank, ZUR 2013, 28 (31). 178

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Sec. 14 cl. 1 BImSchG, which formulates the duty to tolerate, for which Sec. 14 cl. 2 75 BImSchG awards damages, provided that the negative effects of an emission cannot be removed technically or economically, even explicitly refers to “a property’s effects on a neighbouring property”. Yet in the case of parties damaged by climate change effects and potentially affected worldwide, this qualified concern, which distinguishes neighbours from the general public, is lacking, according to the Federal Administrative Court (Bundesverwaltungsgericht).190 Consequently, the claim under Sec. 14 cl. 2 BImSchG is not relevant to climate actions either.191

2. Protection from future impairments As a defence against future impairments, private plaintiffs affected by climate change could assert a negatory defensive claim pursuant to Sec. 1004 (1) cl. 1 or cl. 2 BGB.192 It states that the owner of a thing – in practice usually the owner of a property – can demand that the so-called “disturber” remove a current impairment or omit a future one. Sec. 1004 (1) BGB is also relevant when an owner – as most recently in the RWE case – demands compensation for costs incurred to defend against future dangers.193 According to settled case law, a disturber is someone whose behaviour has adequately caused the impairment (disturber by action) or whose will determines the removal or forbearance of an impairing condition that can be attributed to him/her (disturber by condition).194 According to the plaintiff’s presentation, in the RWE case, the impairment of the Peruvian farmer’s property consists in the threat of flooding as a result of the glacier melt.195 He argues that this is a consequence of the increased CO2 concentration in the atmosphere, for which RWE is jointly responsible.196 But this attribution also presupposes a causal link between the CO2 emissions and the risk that the glacial lake will flood.197 The following section presents a short overview of current case law on the question of causality.

190 BVerwG, judgment of 22.10.1982–7 C 50/78, NJW 1983, 1507, 1507 et seq.; cf also BGH, judgment of 10.12.1987 – III ZR 220/86, BGHZ 102, 350, 354 (Waldschaden). 191 Pöttker, Klimahaftungsrecht, 91; Wagner, in: MüKoBGB, Sec. 823 BGB, mn. 893. Similarly the BGH in the forest damage decision (Waldschadensurteil), BGH, judgment of 10.12.1987 – III ZR 220/86, BGHZ 102, 350, 354. 192 Pöttker, Klimahaftungsrecht, 91 et seq. 193 The regional court of Essen confirmed settled case law, according to which an owner – if removing the impairment him- or herself, pursuant to sections 683, 670, 677 or sections 684, 812 para. 1 cl. 1 alt. 2 BGB – can demand restitution from the disturber for the costs incurred in removal. This presupposes that a right to removal or forbearance even existed in the first place, Regional Court Essen, judgment of 15.12.2016–2 O 285/15, ZUR 2017, 370 (372). On this also Pöttker, Klimahaftungsrecht, 95 et seq. 194 BGH, judgment of 18.4.1991 – III ZR 1/90, NJW 1991, 2770 (2771); BGH, judgment of 4.2.2005 – V ZR 142/04, NJW 2005, 1366 (1368); BGH, judgment of 1.12.2006 – V ZR 112/06, NJW 2007, 432; Fritzsche, in: Bamberger/Roth/Hau/Poseck (eds.), BeckOK BGB, 52nd ed., status 1.8.2019, Sec. 1004 BGB, mns. 17, 21. 195 Statement of claims from 23.11.2015, 27 et seq. 196 Statement of claims from 23.11.2015, 27 et seq. According to the claim, RWE is disturber of condition, since, as the owner, it controls the emitted greenhouse gases, thus deliberately causing the emissions, cf statement of claims from 23.11.2015, 30 et seq. By contrast, the regional court of Essen reviews a disturbance of action. While this is convincing inasmuch as RWE controls its emissions, the impairment, according to the plaintiff’s presentation, lies in the flooding risk of the sea, which RWE does not possess, cf Frank, NVwZ 2017, 664 (665). 197 Statement of claims from 23.11.2015, 32 et seq.; Frank, NVwZ 2017, 664 (665).

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3. Proof of causality as central hurdle of private climate actions The difficulty of proving the causality of individual emissions for climate change and its possible consequences concerns all named bases of claims equally. After the so-called conditio-sine-qua-non formula, any cause is legally causal whose absence cannot be imagined without eliminating success in its concrete form.198 This is the case according to the Peruvian plaintiff’s argumentation: If there were no RWE emissions, the CO2 concentration would be lower, thus lessening the temperature increase and consequently also the glacier melt, which would then also diminish the risk of flooding.199 81 Contrary to the plaintiff’s presentation, however, the regional court of Essen refused to conclude legally relevant causality from scientific causality200 in the first instance.201 Following the principles of the Federal Court of Justice’s forest damage decision (Waldschadensurteil),202 the regional court denies an individual causal relationship: In the case of so-called combined immissions, where the sum of individual emissions inflicts damage, the emission contributions of the individual CO2 emitters blend together indistinguishably, making it impossible to attribute individual damages to a specific causer.203 In contrast to the pollutant emissions that were held responsible for forest damage, in the case of CO2 emissions it is sure that every emission contributes to climate change. Nevertheless, the causal chain in climate change is “much more complex, more multipolar, and thus more diffuse”, which is why the principles of the forest damage decision also apply in the RWE case.204 Moreover, according to the court, the share of RWE’s emissions is so slight (0.47 % of world-wide emissions) that it alone has not significantly increased the possible consequences of climate change. Consequently, adequate causation of the concrete impairment (glacier melt in Peru) is also lacking.205 82 The decision of the Essen regional court was criticized in particular for applying the principles of the forest damage decision.206 Since the emitted CO2 disperses evenly in the atmosphere, every CO2 emission – unlike SO2 emissions, whose effect is locally limited – affects climate change equally, regardless of its place of origin.207 Regarding determining an emitter’s individual contribution to the impairment, the material facts are too different to permit applying the principles of the BGH to climate change as well.208 Also, it is not entirely unforeseeable that CO2 emissions contribute to climate change and can have consequences such as the melting of glaciers, which is why adequate causality exists.209 In the final analysis, climate damages are attributable, and therefore, there are no discernible reasons for dissolving the liability of major emitters for the effects of climate change they have jointly caused in a “factually collective unaccountability”.210 80

198 BGH, judgment of 19.10.2016 – IV ZR 521/14, NJW 2017, 263, mn. 14; Grünberg, in: Palandt Bürgerliches Gesetzbuch, 78th ed., 2019, preliminary remarks to Sec. 249 BGB, mn. 25; Kötz/Wagner, Deliktsrecht, 13th ed., 2016, mn. 186. 199 Statement of claims from 23.11.2015, 32 et seq.; Frank, NVwZ 2017, 664 (666). 200 On the scientific detection and attribution of climate change, cf supra mns. 17‐26. 201 LG Essen, judgment of 15.12.2016–2 O 285/15 (not final), ZUR 2017, 370, mn. 43. 202 BGH, judgment of 10.12.1987 – III ZR 220/86, BGHZ 102, 350, NJW 1988, 478; see also BVerfG, decision of 26.5.1998–1 BvR 180‐88, NJW 1998, 3264. 203 LG Essen, judgment of 15.12.2016–2 O 285/15, ZUR 2017, 370 (372), mn. 45. 204 LG Essen, judgment of 15.12.2016–2 O 285/15, ZUR 2017, 370 (372), mn. 45. 205 LG Essen, judgment of 15.12.2016–2 O 285/15, ZUR 2017, 370 (372), mn. 46. 206 Frank, NVwZ 2017, 664 (667). 207 Frank, NVwZ 2017, 664 (667); cf already supra mns. 14‐15. 208 Frank, NVwZ 2017, 664 (667 et seq.). There also on adequately causal causation. 209 Frank, NVwZ 2017, 664 (668 et seq.). 210 Frank, NVwZ 2017, 664 (669); Frank, NVwZ 2018, 960 (962).

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Yet on the whole, so far the doubts about private climate change litigation prevail: 83 Some voice concerns about foisting off individual economic consequences of climate change arbitrarily on individual emitters by way of non-contractual liability law, since in principle every individual (and also every individual consumer) is an emitter and therefore can be considered a liable party.211 Rather, political solutions are needed to achieve a just balance for the interests affected by the global problem of climate change.212 Also with regard to the division of powers, these arguments suggest that there is reason to doubt whether the courts are the right actors to regulate climate change.213 In the RWE case, too, the last word has not yet been spoken: At the appeal stage, the 84 Higher Regional Court Hamm has considered the Peruvian farmer’s petition against RWE conclusive and has begun hearing evidence.214 In doing so, it does not preclude the possibility of a causal connection from the outset but emphasizes that the hearing of evidence must be awaited.215 In conclusion, it must be noted that private climate change litigation, as it was also 85 introduced in Germany with the RWE case, certainly attracts public attention and can therefore promote the political discourse on climate change.216

VII. Summary 1. Like in human rights litigation, private enforcement in civil courts is also becoming 86 increasingly important in climate protection. It stands next to public-law climate protection as its own area of climate change litigation. 2. The liability of private companies (paradigmatically: CO2 emitters, such as energy corporations in particular) for the effects of global climate change presents new challenges not only for the applicable national tort law but before that also for the international law of procedure and private international law. 3. The international jurisdiction of German courts follows from art. 4 in conjunction with art. 63 of regulation no. 1215/2012, provided that the defendant company has its statutory or administrative seat in Germany. Moreover, German courts can have jurisdiction internationally, based on the forum of the tort, art. 7 no. 2 of regulation no. 1215/2012, if the place of conduct (place of the emitting plant or place of the corporate management decision) is located on domestic territory. 4. Pursuant to art. 14 of the Rome II regulation, the parties of a climate action can choose the applicable law later. If they have not chosen a law, art. 7 of the Rome II regulation is applied, which contains a special conflict rule for transnational environmental damages. 5. In contrast to the basic rule of art. 4 of the Rome II regulation, the ubiquity principle applies to the environmental offense statute: The damaged party can choose whether the law of the place of conduct or the place of damage is applied. In climate cases, the latter may be situated anywhere in the world.

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Ahrens, VersR 2019, 645 (646); Hanschel, in: German National Reports, 635 (653). Hanschel, in: German National Reports, 635 (653): “Litigation appears unsuitable to tackle climate damage in an encompassing and fair way”. 213 Wegener, ZUR 2019, 3 et seq.; for the delimitation of the competences of the legislative power and the judiciary see Pöttker, Klimahaftungsrecht, 434 et seq. 214 OLG Hamm, decision of 30.11.2017 – I-5 U 15/17, ZUR 2018, 118. 215 OLG Hamm, decision of 7.2.2018 – I-5 U 15/17, available at https://germanwatch.org/de/14198 (last consulted on 27.9.2019). 216 Thus also Hanschel, in: German National Reports, 635 (653); Pöttker, Klimahaftungsrecht, 444. 212

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6. Despite the particularities of a climate action, it is not necessary to correct the conecting factor place of damage. A fair balance can be struck between damaging and damaged party by taking into consideration a plant license at the level of substantive law and by means of datum theory, in accordance with art. 17 of the Rome II regulation. 7. In German substantive law, private emitters may be liable on the basis of environmental liability law, general tort law (Sec. 823 (1) BGB), and negatory liability (Sec. 1004 BGB). But the neighbourly claims to compensation (limited to the region) under Sec. 906 (2) cl. 2 BGB, Sec. 14 cl. 2 BImSchG are not applicable to global environmental damages. 8. The central hurdle of all substantive bases for claims is the proof of a causal relationship between the defendant’s emission and the damage to or the impairment of the plaintiff. Thus far, the domestic courts have not affirmed this causal relationship.

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PART 5 LIABILITY FOR CLIMATE DAMAGES – GERMANY AS AN INTERNATIONAL PIONEER? T. Liability for climate damages under the German law of torts Bibliography: Chatzinerantzis/Herz, Climate Change Litigation – Der Klimawandel im Spiegel des Haftungsrechts, NJOZ 594 (2010); Deutsch, Allgemeines Haftungsrecht, 2nd ed., Heymanns 1996; Frank, Climate Change Litigation – Klimawandel und haftungsrechtliche Risiken, NJOZ 2296 (2010); Frank, Klimawandel – (auch) juristisch keine Blackbox, NVwZ 960 (2018); Gursky, Bereicherungsanspruch bei Selbsterfüllung?, NJW 782 (1971); Gursky, in: J. von Staudingers Kommentar zum Bürgerlichen Gesetzbuch, §§ 903–924, 15th ed., 2015, Sellier – de Gruyter; Hager, in: Rohmer/Landmann, Umwelthaftungsgesetz, 91st ed. 2020, Beck; Herrler, in: Palandt – Bürgerliches Gesetzbuch, 79th ed. 2020, Beck; Ismer, Klimaschutz als Rechtsproblem, 2014, Mohr Siebeck; Intergovernmental Panel on Climate Change, Climate Change 2013, The Physical Science Basis. Contribution of Working Group I to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change, 2013, Cambridge University Press; Kling, Die Klimaklage gegen RWE–Die Geltendmachung von Klimafolgeschäden auf dem Privatrechtsweg, KJ 213 (2018); Kötz/ Wagner, Deliktsrecht, 13th ed. Vahlen, 2016; Oetker, in: Münchener Kommentar zum BGB, vol. 2, 8th ed. 2019, Beck; Posner/Weisbach, Climate Change Justice, Princeton University Press, 2010; Pöttker, Klimahaftungsrecht, Mohr Siebeck, 2014; Raff, in: Münchener Kommentar zum BGB, vol. 8, 8th ed. 2018, Beck; Reimann/Zimmermann (eds.), Oxford Handbook of Comparative Law, 2nd ed. OUP, 2019; Roth, in: J. von Staudingers Kommentar zum Bürgerlichen Gesetzbuch, §§ 903–924, 16th ed., 2012, Sellier – de Gruyter; Spitzer/Burtscher, Liability for Climate Change: Cases, Challenges and Concepts, Enterprises, JETL 177 (2017); Sutherland, Obligations to Reduce Emissions: From the Oslo Principles to Enterprises, JETL 137 (2017); Tol/Verheyen, State Responsibility and Compensation for Climate Change Damages – A Legal and Economic Assessment, 32 Energy Policy 1109 (2004); Vierhaus/von Schweinitz, in Körner/Vierhaus (eds.), Treibhausgas-Emissionshandelsgesetz, 2007, Beck; Wagner, in: Beuthien, Volker (eds.), Festschrift für Dieter Medicus, 1999, Heymann, p. 589; Wagner, in: Münchener Kommentar zum BGB, vol. 7, 7th ed. 2017, Beck; Wagner, Wesentlichkeit gleich Erheblichkeit? – Zur Harmonisierung von öffentlichem und privatem Nachbar- und Immissionsschutzrecht, NJW 3247 (1991).

Contents I. The German law of non-contractual liability: an overview .................. 1. Overview ....................................................................................................... 2. The law of delict ......................................................................................... 3. Nuisance law................................................................................................ 4. Strict liability................................................................................................ II. A prominent case in German courts: Saúl Ananías Luciano Lliuya vs. RWE AG........................................................................................................ III. The law of delict.............................................................................................. 1. Negligence liability, Section 823 (1) BGB ............................................. a) Scope of protection. .............................................................................. b) Causation ................................................................................................ aa) The finding of causation .............................................................. bb) The standard of proof................................................................... cc) But-for causation............................................................................ dd) Adequate causation........................................................................ (i) Risk aggravation formula ...................................................... (ii) Foreseeabilitiy formula........................................................... (iii) Socially accepted activities are protected from liability.. c) Violation of the duty of care ..............................................................

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Part 5. Liability for climate damages – Germany as an international pioneer? d) Conclusion: No liability for carbon dioxide emissions under Section 823 (1) BGB............................................................................. 2. Breach of statutory duty, Section 823 (2) BGB ................................... 3. Actio doli, Section 826 BGB ..................................................................... IV. Strict liability .................................................................................................... V. Law of nuisance............................................................................................... 1. Actio negatoria, Section 1004 BGB......................................................... a) Overview ................................................................................................. b) The responsible parties under nuisance law ................................... aa) Infringement by condition (Zustandsstörung) ........................ bb) Infringement by conduct (Verhaltensstörung) ........................ c) Illegality ................................................................................................... d) The nature of the remedy ................................................................... e) Conclusion .............................................................................................. 2. Section 906 (2) cl. 2 BGB and Section 14 cl. 2 BImSchG ................. VI. Conclusion........................................................................................................

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The warming of the planet will cause the global climate to change, but it will also change a myriad of microclimates, i.e. the temperature, precipitation, and local weather conditions in a given area. These changes will affect the local ecological equilibria and harm incumbent species that are ill-adapted to the new conditions. The ecological equilibrium of a given area, as well as the plants and animals living there remain outside the reach of private property rights. Harm to such pure ecological interests may give rise to governmental interventions with the aim to restore the environment to its previous condition, to prevent further harm from occurring or to compensate for the harm at another location. 2 In many instances, disturbing the local climate will not only affect the ecological equilibrium together with plant and animal species but also impact private interests. Greenhouse gases such as carbon dioxide are harmless to human life and health and thus do not cause personal injuries, at least not directly, through inhaling them. However, greenhouse gases have the potential to harm property interests, such as ownership of forests, agricultural land or any other piece of real estate. Where a private property interest was harmed as a consequence of climate change, the owner may have cause of action to recover damages. The range of potential respondents for a legal action for recovery of climate change damages is wide. Three classes of potential respondents may be distinguished: (1) states, i.e. the sovereigns that represent the various jurisdictions on the planet, together with supra- and international institutions such as the European Union and the United Nations; (2) private corporations and corporate groups that count among the major emitters of greenhouse gases, such as oil companies, public utility companies, or even the manufacturers of trucks and cars or airplanes who may have contributed to global warming indirectly, (3) consumers and other individuals who contribute to global warming simply by breathing, but also by operating cars, heating up residential buildings and so on. 3 Whoever is singled out as a respondent to a climate-related action for damages, there will be no privity between the parties, i.e. the claimant and the respondent will not be in a contractual relationship with each other. Normally, the parties concerned have nothing to do with each other, do not operate in the same economic sector and are located at a distance from one another. As a result, Cosean bargaining is not an option for the resolution of conflicts of interest and for the settlement of disputes. Therefore, the law of non-contractual liability, the law of torts or delict, respectively, comes into play. 4 While climate change litigation is a rather new phenomenon in law, it does not set foot in a legal no-man’s-land. The German law of non-contractual liability, as codified 1

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in the German Civil Code (Bürgerliches Gesetzbuch – BGB) supplies general rules that apply regardless whether the framers of the code, back in the late 19th century foresaw the particular case at hand. The same is true for causes of action that are scattered across various statutes which impose strict liability on operators of plants and other technical facilities. This paper aims to offer an overview of the liability regimes provided by German law, 5 as they apply to losses incurred as a consequence of global warming.1 The paper is structured as follows: In the first part, it introduces the liability regimes that are most relevant to climate change damage, namely the law of delict and nuisance law (Part I). In the second part (Part II), the paper delves into a current case of climate damages litigation, i.e. a legal action against a major German energy supplier that is pending before the Higher Regional Court of Hamm (Oberlandesgericht Hamm – OLG Hamm). Part III. forms the heart of the paper, offering a thorough exposition of delictual liability, as applied to cases involving harm from climate change. Part IV. and V. briefly investigate the law of strict liability (IV.) and nuisance (V.). Part VI. concludes.

I. The German law of non-contractual liability: an overview 1. Overview The German Law of Non-Contractual Liability is mainly separated into the law of 6 delict and nuisance law. Being a continental legal system with a civil code as the central source of private law, both the law of delict and the law of nuisance are enshrined in the provisions of the German Civil Code. While the law of delict is built upon the fault-principle and thus requires either 7 intention or negligence, a claim sounding in nuisance may lie even where the respondent did not breach any duty but merely caused or is threatening to cause harm to another. As a consequence, nuisance may not only serve as a basis for compensatory relief but also for injunctive relief, i.e. a court order instructing the respondent to terminate an activity that threatens or continues to harm the claimant. Thus, parties who seek compensation for harm that has already materialized will primarily rely on the law of delict while orders to cease and desist will be based on the law of nuisance. Despite the differences, the law of delict and the law of nuisance remain closely 8 related and share common elements. The courts operate the two regimes in a way that ensures consistency between the two: I.e. acts that are deemed lawful under the law of I.e. nuisance (and thus cannot be enjoined) will be classified as lawful under delict law as well (and will thus not result in claims for damages). This point will be further developed below.2

2. The law of delict The German law of delict is codified in Sections 823 et seq. BGB. Unlike other 9 continental legal systems like, famously, the French, the BGB does not supply a single general clause encompassing the full range of non-contractual liability.3 Rather, the founding fathers decided for three so-called “small general clauses”: Section 823 (1), 1 According to Article 7 Rome II Regulation German Law is applicable of environmental damages if the act potentially causing the damage happened in Germany. 2 See infra p. 26 et seq. 3 Wagner, in: Reimann/Zimmermann (eds.), Oxford Handbook of Comparative Law, 2nd ed. 2019, 998 et seq.

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Section 823 (2), and Section 826 BGB. All three provisions attach liability to the establishment of fault. While Section 823 (1) and Section 823 (2) are based on negligence, liability under Section 826 requires proof of intentional wrongdoing. The most important head of liability is Section 823 (1) BGB which imposes fault-based liability for the wrongful infringement of a protected interest. The interests protected under Section 823 (1) BGB are specifically listed in the statute. The most fundamental human rights, such as life, health, bodily integrity, freedom of movement as well as property are listed. Any intentional or negligent infringement of one of these rights triggers a right to compensation. The enumeration of subjective rights as protected interests is above all significant for what it does not protect, namely pure economic losses, i.e. losses that are not the consequence of the infringement of a subjective right. In a second step, Section 823 (2) BGB attaches liability to the breach of a protective statutory norm (Schutznorm). Any statute that is valid and binding may qualify as such a protective norm, regardless whether it was passed at the federal, the state or the municipal level. On the other hand, it is not sufficient that the tortfeasor breached some statutory duty but that this duty was designed to protect private interests. More specifically, the tort of breach of statutory duty under German law requires that it is the legislative purpose of the statute in question to protect the individual who incurred harm as well as the specific interest that was violated against the specific kind of behaviour the tortfeasor engaged in. Within these limits, Section 823 (2) BGB plays an important role in supplementing regulatory law with a private cause of action that allows victims to collect damages. In doing so, it adds a private remedy, enforced by individual parties, to the arsenal of public-law sanctions. Finally, Section 826 BGB imposes liability for any kind of harm sustained, but only where the tortfeasor acted both intentionally and against good morals (bonos mores). In doing so, Section 826 BGB plays an important role in fleshing out liability for pure economic losses. On the other hand, the provision represents the policy of the BGB to protect subjective rights against intentional or negligent wrongdoing but to withhold such protection for pure economic interests. Leaving the exceptional provision of Section 826 aside, the elements of Sections 823 (1) and (2) BGB have a similar structure, based on the notion of fault. The act violating the protected interest under para. 1 or the protective norm under para. 2 respectively must have been committed intentionally or negligently, and such a wrongful act must have caused the harm complained of.4 The ordinary tort case in Germany is centred around the question whether the tortfeasor acted negligently. Proof of negligence requires a two-step analysis: The first questions to ask is whether the respondent was subject to a duty of care and what such duty required, i.e. what the standard of care required. On a second level, the question is whether the actual behaviour of the respondent complied with the standard of care that was applicable to the situation at hand. The law of delict, as codified in the German Civil Code, is of general nature and thus, as a matter of course, also applies to climate change damage. In other words, liability for harm caused by the warming of the planet may be based on Sections 823 (1) and (2), 826 BGB.

3. Nuisance law 15

The actio negatoria enshrined in Section 1004 BGB is the crux of the matter of German nuisance law. It provides an injunction action for the impairment of property. By analogy this provision is applicable to other erga omnes rights. The action requires 4

Kötz/Wagner, Deliktsrecht, 2016, para. 112.

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that the property (or other subjective rights) of the claimant is impaired by an act of the potential respondent. It is sufficient for the injunction that the impairment is present or even only threatening, as well as unlawful. Negligence or other forms of fault are – from a conceptional point of view – not necessary to constitute the injunction. As to the question what an unlawful act is Section 906 BGB complements the claim 16 under Section 1004 BGB with a differentiated system for emissions between neighbouring properties which also functions as the basic formula of what is permitted for emitting parties vis-à-vis parties that are negatively affected by those emissions. The provision operates with a threefold hierarchical cascade of criteria to determine whether a particular impairing use of a piece of land (usually a use resulting in emissions of one type or another) can be forbidden by an affected party (usually a neighbour), or if the affected party has at least a right to compensation in money: First, it depends on the significance of the emissions (which can be regulated by the legislator for certain typical emissions by the means of statutory orders); second, it depends on if it is a use of land that corresponds with the local customs; third, it depends on if the emissions can be avoided by measures of the emitter that are economically feasible. By and large, this system of injunction reliefs and compensations claims aims at striking an optimal – in the Coasian sense: efficient – balance for conflicting uses of neighbouring properties. The primary legal consequence of an action according to Section 1004 BGB is 17 injunction. If an impairment is lawful and has thus to be tolerated, the impaired party can claim compensation (Ausgleich) according to Section 906 (2) cl. 2 BGB under certain circumstances. Compensation for damages for unlawful violation of the property cannot be sought under this regime as this is the territory of delict law with its particular requirements. Such tortious compensation (Schadenersatz) claims can potentially reach way further as they are meant to provide full recovery of the physical damage to the property and also resulting negative impact on the affected party’s patrimony. Finally, the claim under 1004 BGB can be converted into a claim for compensation of expenses if the impaired party takes the necessary measures to remove an impairment at her own expense.

4. Strict liability German law does not include a general clause of strict liability. Over the years, several 18 categories of strict liability were established by the lawmakers, in special statutes regulating certain activities, like operating a motor car or a power plant. These provisions remain limited to the activities they were designed to regulate.5 Strict liability applies to several activities that pose above-average risks to others. Since 19 1990, the operators of industrial facilities that pose risks to the environment are held liable under the Environmental Liability Act (Umwelthaftungsgesetz – UmweltHG). This private law remedy is supplemented by a public law instrument, namely the Environmental Damage Act (Umweltschadensgesetz – USchadG), based on a Directive of the European Union. It authorizes environmental protection agencies to issue injunctions against private entities, ordering the prevention and restoration of environmental harm.6

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See infra p. 28 et seq. These provisions are the subject matter of the chapters 19 and 21 in this book and will therefore not be discussed in further detail in this chapter. 6

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II. A prominent case in German courts: Saúl Ananías Luciano Lliuya vs. RWE AG The topic of liability for carbon dioxide emissions has recently gained momentum through a case brought before the Higher Regional Court of Hamm (Oberlandesgericht Hamm – OLG Hamm). In these proceedings, RWE, a major German public utility, has been sued in damages for harm allegedly caused by its carbon emissions. The claimant is a citizen of Huaraz, a Peruvian city with some 55,000 inhabitants. Huaraz is situated at 3100 m altitude in the Peruvian Andes and lies at the foot of the Cordillera Blanca mountain range. Part of this range are the mountains Palcaraju (6274 m) and Pucaranca (6156 m), the peaks of which are covered by glaciers. The runoff from these glaciers feeds a glacial lake, at 4566 m altitude, the so-called Laguna Palcacocha. Downhill, towards the valley, the lake is constrained by a natural moraine, from which the river Río Paria emanates. This river flows more than 20 km down the canyon, before merging with the Río Quilcay near the city of Huaraz. The Río Quilcay, in turn, flows through the urban area and heads west. The glaciers that discharge into the Laguna Palcaocha have been shrinking for many years, since the Little Ice Age. As a consequence, the water level in the glacial lake has been increasing. Matters came to a crisis in December 1941, when the moraine rampart broke and a tidal wave stormed into the canyon below and flooded the valley beneath. Approximately 15 minutes after the breach, the flood wave carrying lots of debris reached and destroyed parts of the city of Huaraz. According to estimations, the wave took between 1,800 and 5,000 human lives. 21 Since then, the water level in the Laguna Palcacocha has been increasing again but has not reached the peak level of 1941. In order to safeguard the moraine of Laguna Palcacocha, a variety of measures were taken, including two artificial dams. In recent years the water volumes have risen to levels that may or may not indicate an immediate threat to another outbreak and subsequent flooding of the city. 22 Saúl Ananías Luciano Lliuya is co-proprietor of a house in Huaraz and feels threatened by the Laguna Palcacocha. In his view, the melting of the glaciers in the Peruvian Andes is caused by man-made climate change. He demands that RWE contributes to the costs of safety measures to be taken at Laguna Palcacocha in proportion to RWE’s purported share in anthropogenic emissions of greenhouse gases since the beginning of the industrialization. A study on which the claimant relies estimates RWE’s share at 0.47 %.7 With this claim, claimant Saúl Ananías Luciano Lliuya filed an action in the District Court of the city of Essen (Landgericht Essen – LG Essen) against RWE.8 The lawsuit is backed by the NGO Germanwatch and, for the claimant, financed by the private foundation Zukunftsfähigkeit.9 23 The LG Essen, on 15 December 2015, handed down a judgment dismissing the claim in its entirety.10 According to the court, the public utility company could not be classified as wrongdoer in the sense of German nuisance law. It held that the greenhouse gas emissions of the company did not constitute a legal cause for the dangerous condition of Laguna Palcacocha. The court explained: 20

7 https://www.greenpeace.org/archive-international/Global/international/briefings/climate/2013/MRR8.3-7Nov13.pdf. 8 All relevant documents concerning this civil lawsuit against RWE AG can be found on the website of Germanwatch: https://www.germanwatch.org/de/14198. 9 See https://www.germanwatch.org/de/14577#Welche%20Rolle%-20 spielt%20Germanwatch?. 10 LG Essen, 15.12.2016, 2 O 285/15; to be found in the internet on: https://www.germanwatch.org/ sites/germanwatch.org/files/static/19023.pdf.

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“The pollutants emitted by the respondent are only a fraction of a countless amount of other pollutants that are discharged by a great number of small- and large-scale sources. Every living human being is an emitter of greenhouse gases, more or less. A finding of cumulative causation requires that the contributions of all emitters taken together caused the risk in question. For causation to be established, the flood risk must exist but for the respondent’s past and future greenhouse gas emissions. This is not the case. In light of billions of concurrent emitters worldwide, even the emissions of large-scale emitters such as the respondent, are not of such significance that climate change and the resulting flood risk would not exist, had the respondent not caused the emissions.”11 Against this judgment the claimant appealed to the OLG Hamm.12 The 5th Civil Senate of the OLG Hamm, where the appeal is pending, has revealed some sympathy for the claimant’s view. In the hearing of 13 November 2017, the court deemed the claim to be genuine. In its order dated 30 November 2017, the court ordered the taking of evidence. According to the court, the success of the action depends on two sets of facts, namely the existence of a real risk for the claimant’s property and on the size of the public utility’s share in global greenhouse gas emissions since industrialization. The case pending before the OLG Hamm is a high-profile example of climate change litigation in Germany. This is why the following analysis will return to the case when necessary. Of course, the scenarios and fact patterns of climate change litigation that may be brought before German courts are not limited to the pattern of the RWE-Case. From a legal point of view, cases where harm is not only impending but has already occurred are even more straightforward in pinpointing the central issues than the case before the OLG Hamm. The harm complained of need not be limited to damage to property interests but may include personal injury as well. It does not require much phantasy to imagine possible harms caused by a general rise of sea levels in coastal and marine environments. Climate change may also lead to extreme weather situations that cause damage through thunderstorms, floodings, warm and cold periods, or indirectly as a result of droughts, landslides and wide-scale fires. All in all, there is an unlimited number of situations in which climate change could “materialize” as harm to legally protected interests. On the side of potential respondents, future cases could be directed against other emitters of greenhouse gases than power suppliers, namely the transportation industry, agriculture and even consumers as emitters of greenhouse gases. Most certainly, the RWE-case sketched will ultimately be decided by the German Supreme Court, (Bundesgerichtshof – BGH) and then serve as a landmark case for climate change liability in Germany. The critical questions for any such claim to succeed are all being raised by the case now pending before the OLG Hamm, i.e., causation of i.e. actual harm by the emissions of a single polluter, and breach of duty by emitting greenhouse gases. The following analysis focusses on these issues and takes for granted that the rise in average temperature that can be observed since a few decades and is still ongoing is man-made, i.e. that rising temperatures are caused to a large extent by anthropogenic emissions of greenhouse gases.

LG Essen, 15.12.2016, 2 O 285/15, p. 7 – Translation by the authors. Reasoning of the appeal OLG Hamm, I-5 U 15/17, 23.02.2017, p. 2; in the internet on: https:// germanwatch.org/sites/germanwatch.org/files/static/19025.pdf. 11 12

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III. The law of delict As laid out in Chapter one, the German law of delict is based on three heads of liability: liability for intentional or negligent infringement of protected rights under Section 823 (1) BGB, liability for breach of a statutory duty under Section 823 (2) BGB and liability for intentional, immoral behaviour under Section 826 BGB. In this chapter the German law of delict will be applied on the emission of carbon dioxide gases potentially resulting in individual harm. 29 At the outset, it is important to note that an indispensable element of delictual liability is the occurrence of harm. In order to recover under the law of delict, the victim must have incurred actual losses. Thus, the law of delict does not reach situations like the one in the RWE case, reported above, where the claim is for preventive or remedial measures. 28

1. Negligence liability, Section 823 (1) BGB 30

Reconsidering the elements of Section 823 (1) BGB, a pertinent case could be framed like this: By emitting greenhouse gases a public utility or other major emitter of carbon dioxide negligently caused the climate to change, i.e. temperatures to rise, which in turn led to the infringement of tangible property or another absolute right of another. Thus, the key elements of such a claim are: (a) violation of a protected right, (b) causation and (c) fault, i.e. negligence.

a) Scope of protection. The scope of protection of fault-liability under Section 823 (1) BGB is limited to a list of protected interests: life, body, health, freedom of movement, property and similar rights. With a view to harm caused through climate change the damage and destruction of private property will play the most important role. Rising sea levels, more serious and more frequent thunderstorms, floods caused by heavy rainfalls, and drought due to long periods without precipitation, all these natural phenomena will threaten human assets, such as agricultural land, forests, residential and commercial real estate, production sites and more. 32 Moreover, the physical well-being of individuals can be affected by climate change. People will sustain injuries from accidents caused by exceptional weather disturbances such as thunderstorms. Furthermore, higher temperatures will set the human body under more stress which will impair the overall health of people and lead to serious illnesses. Especially the elderly and already infirm patients will suffer from the heat. There is no doubt that Section 823 (1) BGB protects everyone’s interests in one’s life, health, and bodily integrity. 33 Losses that cannot be traced back to the infringement of a subjective right do not qualify for compensation under Section 823 (1) BGB. In particular, pure economic interests remain outside the scope of protection. Thus, owners of beach bars on the shore of a lake cannot recover under Section 823 (1) BGB if the lake dries up due to lack of precipitation so that visitors stay at home. The same is true for the operators of ski resorts who sustain losses if the snow is melting away due to global warming. As these examples show, a substantial part of climate change related losses incurred by individuals will remain outside the law of delict. 34 Another limitation of the protective perimeter of Section 823 (1) BGB is the distinction between private and public goods, i.e. goods in the public domain. Many aspects of the environment count among public goods. This is of course true for the climate as such, but also for natural resources such as air and water. If the Arctic melts away or Antarctica or Greenland lose their ice shields, Section 823 (1) BGB provides no remedy, 31

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even if the provision governed a claim for damages. Animals that are not subject to private shooting rights or rights of appropriation, such as animals living in the high seas, are not protected. It is important to remember that the legal system may transform a common good 35 into a private one, i.e. by granting rights of exclusion and protecting the right to use the good in question. Shooting rights for wild animals were mentioned already, and fishing rights are another example. Thus, the right to fish and the right to hunt are subjective rights protected under Section 823 (1) BGB. If animals subject to these rights are killed wrongfully, this may trigger liability. b) Causation. aa) The finding of causation. The first major threshold for the claimant 36 to overcome in the RWE case and other potential claims for the recovery of climate change-related harm, is causation. The question is whether the behaviour of utility companies and other major emitters of greenhouse gases actually caused the harm complained of. Section 823 (1) BGB clearly requires the establishment of a causal link between the negligent behaviour of the tortfeasor and the infringement of a protected right. Causation under German private law doctrine has two components:13 The first component is the but-for test, which requires a causal link in a factual sense. The alleged behaviour or omission of the tortfeasor has to be an actual cause of the injury in the sense of a conditio sine qua non. Under the but-for test, an act has caused an injury if the injury would not have happened but for the act in question.14 Because the scope of causes that can be identified with the help of the but-for test remains exceedingly broad,15 a second test of causation was developed, namely adequate causation.16 Under adequate causation an act is classified as the cause of the injury only if it led to a serious increase of the risk of harm and if the harm complained of is within the natural course of events that can be expected to flow from the respondent’s wrongful act.17 The question whether the emissions of greenhouse gases caused a particular infringe- 37 ment of a subjective right cannot be answered in general but only with a view to specific fact patterns. Still, it seems that climate change litigation will raise the same or at least similar issues of causation over and over again. This warrants a general and somewhat stylized discussion of the general questions of causation that are likely to surface in most such cases. Most likely, these cases will involve a causal chain involving the following elements: (1) the greenhouse gas emissions of the respondent, (2) global warming, i.e. the rise of global temperatures, (3a) the alteration of a particular microclimate or (3b) the rise of the water level of a particular resource, (4) weather incident or other move of nature that led to the impairment of the claimant’s rights. As mentioned before, the analysis assumes that the causal link between the first two elements of the chain, i.e. the emission of greenhouse gases and global warming can readily be established, in accordance with the nearly unanimous view in the natural sciences. It is the link between the elements 2, 3 and 4 that may be difficult or even impossible to establish. bb) The standard of proof. The German law of civil procedure subscribes to an 38 ambitious standard of proof that also applies to the element of causation. Under Provision 286 of the German Code of Civil Procedure (Zivilprozessordnung – ZPO), the causal chain must be proven beyond reasonable doubt. It is not enough for the 13 Cf Wagner, in: Münchener Kommentar zum Bürgerlichen Gesetzbuch, 7th ed. 2017, BGB § 823 para. 67. 14 See infra p. 13 et seq. 15 In its most extreme version even the parents of a murderer were causal for the murder as they set a necessary condition by procreating her. 16 See infra p. 17 et seq. 17 Cf MünchKomm-Oetker, 8th ed. 2019, BGB § 249 para. 110.

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claimant to show that, on the balance of the probabilities it is more likely than not that the respondent’s behaviour caused the injury in question. 39

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cc) But-for causation. It is expected that, as a consequence of global warming, the incidence and severity of extreme weather conditions will increase. In plain language, there will be more storms, floods and droughts, and heat-waves. Such events will take many lives, will injure a large number of people, and will destroy substantial assets held in private ownership. Without a doubt, the losses caused by extreme weather conditions such as storms, heavy precipitation or continued lack of precipitation will add up to substantial losses threatening the well-being of individuals as well as local communities and even societies at large. While it may be taken for granted that the emission of greenhouse gases and the resultant increase in global surface temperatures increases the incident and severity of extreme weather conditions, this does not establish the causal link between such emissions and a particular incident, such as a storm, a flood or a drought. Rather, one must assume that the same weather condition could also have occurred without global warming. While it remains true that, on average, the frequency and severity of extreme weather is increasing, any single event could have happened without global warming, too. Thus, the test of but-for causation, that global warming is conditio sine qua non of the injury complained of is not satisfied in such cases.18 This conclusion must be taken very seriously, as it works to exclude a large fraction of climate change losses from the protective perimeter of the liability system. In other scenarios that do not involve extreme weather, proof of causation may turn out to be difficult for other reasons. The case pending before the OLG Hamm is a good example as no weather is involved. It seems that the lake of Laguna Palcacocha accumulates the runoff caused by the greenhouse gas emissions of all humankind. This conclusion may be premature, however. While the causal link between greenhouse gas emissions and the rise in average global temperatures rests on solid ground, the microclimate of a particular region is a different matter. It is conceivable that, even though global temperatures are on the rise, average temperatures in certain regions may actually fall as a consequence of global warming. This makes it difficult, if not impossible to establish a causal link between greenhouse gas emissions and the state and development of a given regional microclimate. It seems even more difficult to link the state of regional microclimate to the greenhouse gas emissions of a particular entity. Proof of but-for causation of a particular contribution, in the sense of a conditio sine qua non, requires more than some general relation between greenhouse gas emission and climate change. Rather it must be established, if and to what degree the specific contribution of the respective emitter caused the harm in question. Case law on administrative environmental law denies establishment of a cause and effect relationship between the emissions of a certain plant and the development of the global climate.19 Civil courts confronted with claims for climate change damages are faced with the even more daunting task of establishing a causal link between the emissions of the respondent and the conditions of the regional climate that were the direct cause of the claimant’s loss. In other words, it must be proven that the condition of the microclimate would be different if the emissions of the respondent were subtracted from the global 18 Chatzinerantzis/Herz, NJOZ 2010, 594 (596 et seq.); Pöttker, Klimahaftungsrecht, 12 et seq., 45 et seq.; Spitzer/Burtscher, JETL 2017, 137 (166 et seq.); Posner/Weisbach, Climate Change Justice, 109 et seq. 19 VGH Mannheim, 20.7.2011, 10 S 2102/09, para. 57 (juris), NVwZ 2012, 127; OVG Münster, 16.6.2016, 8 D 99/13.AK para. 407 (juris), DVBl 2016, 1191.

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greenhouse gas balance. Establishing such a causal link between the emissions of a particular entity and a particular regional climate condition seems problematic, if not impossible.20 The greenhouse gas emissions of major corporations such as a public utility may seem significant in their own right; in comparison to the total amount of global emissions they remain marginal, even if the starting point in time for the calculation is randomly set at the beginning of industrialisation. It is impossible to determine the extent to which particular emissions contributed to the rise of temperatures or other climate conditions at a certain place on earth.21 To put it bluntly: Even if the contribution of an emitter to global warming is beyond doubt, just as it is beyond doubt that a particular ascertainable climate condition caused a particular damage, it is never possible to link the two in the sense of a conditio sine qua non. Thus, the establishment of but-for causation in climate damages cases is practically not feasible.22 Some commentators suggest to overcome the described intricacies and uncertainties 44 of causation with the help of the rather simple idea of plausible contribution.23 Albeit but-for causation in the strict sense cannot be established, it still seems likely that the contribution of a major emitter such as a public utility has contributed substantially to global warming and that global warming, in turn, has substantially contributed to certain climate-related risks. It is suggested that this is sufficient to establish causation. But how serious must but-for causation be taken in the German law of delict? The BGH answered this question in its famous decision on acid rain involving harm to forest owners. The court insisted on a strict application of the doctrines on causation. The acid rain-case of the BGH was about state liability damage to forest stands that 45 resulted from air pollution with sulphur and nitrogen oxides far distant from the place of harm.24 The Federal Republic of Germany had been sued, together with the state of Baden-Württemberg on the basis of the German Clean Air Act (Bundesimmissionsschutzgesetz – BImSchG). The BGH rejected the claim for want of a cause of action.25 In addition, the court argued that a claim for damages required proof a causal link between the victim and one or more individual emitters which was lacking where the contributions of many emitters added up to aggregate pollution.26 The court added the thought that the law of noncontractual liability was ill-suited to manage a “global phenomenon”, and that the courts were not the competent institutions for such a task.27 This decision sets the standard for proof of causation in climate damages cases. It means that it is not warranted to deviate from well-established standards that follow a strict approach. Yet, some commentators argue against transferring the reasoning of the BGH in the 46 acid-rain-case to climate damages.28 The argument is that acid rain is the result of a 20

Spitzer/Burtscher, JETL 2017, 137 (167). Intergovernmental Panel on Climate Change, Climate Change 2013, Chapter 11, 953 et seq.; Posner/ Weisbach, supra (fn. 18), 109 et seq. 22 On climate change litigation generally Ismer, Klimaschutz als Rechtsproblem, p. 39 et seq.; Sutherland, JETL 2017, 177 (190 et seq.). 23 For instance Frank, NJOZ 2010, 2296 (2298) makes this argument with regard to the rise of ocean sea levels and bases the loosening of the requirements to establish causation on the procedural provision of Section 286 ZPO which indeed does not require perfect certainty, but as the BGH ruled in its famous Anastasia decision (BGHZ 53, 245) a degree of certainty that is useful for practical life, that silences doubt without eliminating it altogether. This deviation from a perfect certainty standard, however, is necessity of reality as otherwise no proof could ever be established. It is not the permission lowering the standard to plausibility. 24 BGH, 10.12.1987, III ZR 220/86, BGHZ 102, 350. 25 BGH, 10.12.1987, III ZR 220/86, BGHZ 102, 350, 352 et seq. 26 BGH, 10.12.1987, III ZR 220/86, BGHZ 102, 350, 354. 27 BGH, 10.12.1987, III ZR 220/86, BGHZ 102, 350, 362. 28 Kling, KJ 2018, 213 (220 et seq.); Frank, NVwZ 2018, 960. 21

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complex interaction between different chemical substances while the cause of global warming is a strictly additive in the sense that greenhouse gas emissions cause proportional, albeit miniscule increases in global average temperatures. In addition, the location of the source of the emissions is insignificant for global warming. While all this is true, the cause-effect-relationship that must be established in order to link the emissions of an individual emitter to particular damage sustained by another individual is complex as well.29 47 Compared to global warming, acid rain caused by SO2 and NOx emissions was a regional problem at best, as emissions were distributed across a rather small area. In contrast, climate change caused by greenhouse gas emissions is a global phenomenon to which each and every emitter on the planet contributes. This is not only true for today’s emitters but also applies to each and every emitter that ever walked the earth. In addition, factors such as deforestation and the growth of human populations play a large role in the development of the global climate. Carving out individual causal relationships in a two-party-setting between a party that was negatively impacted by climate changes and one or more emitters is even less feasible than in the case of acid rain. Usually, it will not even be possible to quantify the increase in risk.30 In conclusion, the holding of the court in the acid rain case stands in the way of an approach that suggests to overcome causal uncertainties with the help of a judicial act of will or faith. 48

dd) Adequate causation. Pursuant to the dominant view in legal doctrine and jurisprudence, but-for causation is not sufficient to trigger liability under the law of delict. Rather, adequate causation is required. The adequacy requirement introduces an element of foreseeability into the analysis of causation that would better be dealt with at the breach of duty stage.31 As the courts hold on to the theory of adequate causation, it poses a hurdle for claimants that must be overcome in order to succeed with a claim for damages. The courts do not operate a single definition of adequacy but use several formulae.32 The most relevant of these formulae need to be discussed.

(i) Risk aggravation formula. One traditional explanation of adequate causation focuses on whether the cause at issue has substantially increased the probability of harm. In a seminal decision of the 5th senate of the BGH, the court found adequate causation between an architect’s breach of duty and the collapse of a building, as the act of the respondent, had “not insignificantly” increased the risk of collapse.33 50 When this principle is applied to climate change cases, the pivotal question again is whether shifts in the microclimate of any particular area can be attributed to the greenhouse gas emissions of any single entity, even if it counts among the major emitters. The aggregated greenhouse gas emissions even of today’s largest carbon dioxide emitters, such as public utilities, in themselves represent only a tiny fraction of the total amount of global emissions that they do not cause a significant increase in the probability of shifting climate conditions and the resultant harm.34 Taking any single emitter out of the equation has no significant effect on the climate. 49

29 Chatzinerantis/Herz, NJOZ 2010, 594 (598); Pöttker, supra (fn. 18), 12 et seq., 45 et seq., 317 et seq., 421 et seq.; Posner/Weisbach, supra (fn. 18), 109 et seq. 30 Chatzinerantis/Herz, NJOZ 2010, 594 (598); Pöttker, supra (fn. 18), 49 et seq., 426 et seq. 31 Kötz/Wagner, Deliktsrecht, para. 193. 32 MünchKomm-Oetker, BGB § 249 para. 109 et seq. 33 BGH, 19.11.1971, V ZR 100/69, NJW 1972, 195. 34 In the RWE-Case (see II.) the claimant considers the fraction of emissions of the respondent in the global total to be about half a percent. RWE ranks over time and size of its emission among the top

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(ii) Foreseeabilitiy formula. Another common formula of adequacy, which goes back to the jurisprudence of the former Imperial Court of Justice that existed until 1945 (Reichsgericht – RG) focuses on the chain of causation and asks whether the cause in issue was generally suitable to trigger the effect in question or whether it needed exceptionable, unlikely and unforeseeable circumstances to bring about the untoward event.35 Here, adequacy ultimately turns on foreseeability, with the measure of foreseeability being more generous than the one applied under the negligence formula. When the foreseeability test is applied to climate change damage, a huge fraction of greenhouse gas emissions drop out of the analysis. While climate scientists speculated about a correlation between the carbon dioxide concentration already in the 19th century, the risk of a rise in temperatures became a relevant topic of scientific interest only in the eighties of the 20th century. It is well accepted by competent observers that, certainly before the UN Conference on Human Development at Stockholm in 1972, and possibly not until 1990, when the IPCC took to the stage, the harm caused by carbon dioxide emissions was not foreseeable.36 Until that point in time, the negative impact on the climate through carbon dioxide emissions would have been deemed a circumstance that, “according to the usual course of events, would not have been considered”.37 During most of the 20th century, it would have been thought as extravagant to think about harmful effects of carbon dioxide to human interests, or even to ecosystems. After all, carbon dioxide is a non-toxic gas that is part of the natural atmosphere. The increase in concentration caused by human sources is only slight. It is anything but intuitive for an emitter of carbon dioxide to anticipate severe adverse effects, let alone specific detrimental scenarios like the melting of glaciers in mountainous regions, bush fires in Australia or the flooding and resulting extinction of small atolls in the Pacific. A reasonable observer in the shoes of a public utility or other major source of carbon dioxide emissions would not have foreseen these outcomes. As a consequence, the mass of carbon dioxide emissions that occurred before the time when climate change and the resultant harm became foreseeable must be left out of the equation. Only those emissions that were caused after 1990 qualify as legal causes of harm due to climate change. This analysis of foreseeability is challenged by some commentators who embrace an ex-post approach to adequate causation. Pursuant to this view the question whether a certain cause brought about a harmful outcome “only under particularly odd, completely unlikely circumstances that should normally be left out consideration”38 must be answered on the basis of the objective knowledge that is available today.39 Applying what we know about global warming today, it can well be argued that climate change caused by carbon dioxide emissions was readily foreseeable. In contrast, the prevailing opinion takes an ex-ante approach that turns on whether an objective observer, standing in the shoes of the potential tortfeasor, at the time of the harmful act, would have been able to anticipate the course of events and the resulting harm.40 On the basis of this view, carbon dioxide emissions were not to be considered harmful to the environment. To justify the objective ex-post evaluation an old judgement of the BGH is cited in which the court allegedly entrenched this view. But this argument rests on a misunderemitters worldwide (No. 23, see table 12 https://www.greenpeace.org/archive-international/Global/international/briefings/climate/2013/MRR-8.3-7Nov13.pdf). 35 RG, 4.7.1938, V 17/38, RGZ 158, 34 (38). 36 Tol/Verheyen, Energy Policy 2004, 1109 (1118). 37 Posner/Weisbach, supra (fn. 18), 111. 38 Again RG, 4.7.1938, V 17/38, RGZ 158, 34 (38) – Translation by the authors. 39 OLG München, 18.10.1989, 20 U 6522/88, VersR 1991, 1391. 40 MünchKomm-Oetker, BGB § 249 para. 111.

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standing. In fact, the BGH agreed with the ex-ante view, as advanced in the literature prior to the decision.41 Therefore, this decision cannot be relied upon in order to justify the conclusion that it was foreseeable for a reasonable observer even before the 1990s that greenhouse gas emissions would cause climate change, and that global warming would lead to the harmful effects that we see or anticipate today.42 (iii) Socially accepted activities are protected from liability. Even if the requirement of foreseeability was disregarded, adequate causation would still have to be denied because the use of fossil fuels for the purpose of energy production and other industrial activities was and still is a well-accepted activity that society fosters and supports. It is unanimously accepted in legal doctrine that the application of the adequacy test is not a purely conceptual exercise, but rather serves a normative purpose. The key function of adequacy is to exempt socially adequate behaviour from liability.43 The exemption applies as long as the activity is carried out in accordance with the required safety measures. The residual risk is accepted and therefore does not attract liability. 57 Moreover, the claimant’s own contribution to the risk must be taken into account: If, for example, a landowner exposes himself to a particular risk, and the harm incurred is a consequence of the realization of that risk, the resultant damage cannot be shifted to another party.44 Rather, the principle of casum sentit dominus applies. This conclusion may be important for residents of mountainous and coastal areas who stand to suffer damage as a consequence of floods caused by the retreat of glaciers and rising sea levels. 58 Pursuant to these limitations of liability, public utilities as potential respondents of climate change damage claims are protected against liability. Emissions of carbon dioxide are the inevitable byproducts of the operation of a power plant for the purpose of energy production. Up until this day, and at least the near future, this conventional method of energy production is an indispensable part of the power supply of the general public. 59 In Germany, the public mandate of utility companies is enshrined within the energy laws. Pursuant to Section 2 (1) Energy Act (Energiewirtschaftsgesetz – EnWG) the industry is obligated to supply the population with energy. The provision explicitly aims at 56

“a grid-bound supply of electricity and gas that is as safe as possible, inexpensive, consumer-friendly, efficient and environmentally friendly.”45 This public mandate has been rooted in the German Constitution (Grundgesetz – GG) by the Federal Constitutional Court which has recognized the paramount importance of ensuring the energy supply for the public.46 According to the court, access to energy is an indispensable prerequisite for a life in human dignity.47 The constant availability of sufficient energy is also a vital prerequisite for a well-functioning economy. In subsequent decisions the Federal Constitutional Court stressed “that today the interest in power supply is as important as the interest in the daily bread”.48 60 It is of course true that Section 1 (1) EnWG, in its current version, calls for a power supply that is environmentally friendly, which means that utilities must increasingly rely 41

BGH, 23.10.1951, I ZR 31/51, BGHZ 3, 261. Cf, however, Frank, NJOZ 2010, 2296 (2298 et seq.). 43 Ekkenga/Kuntz, in: Soergel – Kommentar zum Bürgerlichen Gesetzbuch, 13th ed. 2014, BGB before § 249 mn. 142. 44 RG, 9.12.1907, IV 202/07, JW 1908, 41 (42). 45 Translation by the authors. 46 BVerfG, 17.12.2013, 1 BvR 3139/08 and 3386/08, BVerfGE 134, 242. 47 BVerfG, 22.10.1982, 1 BvL 28/82, NJW 1984, 1872. 48 BVerfG, 11.10.1994, 2 BvR 633/86, BVerfGE 91, 186: Interesse an Stromversorgung “heute so allgemein wie das Interesse am täglichen Brot.” – Translation by the authors. 42

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on renewable energy. However, the Federal Constitutional Court consistently accepts the use of the more traditional fossil energy sources such as coal, oil, and natural gas.49 In any event, the reference to environmentally friendly power production as a goal of energy law was added to the statute only in 1998. Before that date, the EnWG just called for inexpensive, safe, and reliable energy supply. It was understood that demand of industry and consumers would be met through a combination of nuclear power plants with other facilities burning fossil fuels. To the extent that public utilities relied on fossil fuels before 1998, the carbon dioxide emissions resulting from that use were caused under the cover of a public-law mandate. Furthermore, power plants and other industrial facilities that produce large quantities 61 of carbon dioxide are built and operated on the basis of public permits. These permits effectively legalize carbon dioxide emissions resulting from power production or other activity that was authorized. While carbon dioxide emissions were never mentioned in such permits during the late 19th century and all of the 20th century, this has changed in 2004. With the enactment of the Greenhouse Gas Emissions Exchange Act (Treibhausgas-Emissionshandelsgesetz – TEHG) in 2004 the release of carbon dioxide into the environment requires a special permit. With a view to plants that already existed at the time the act came into force, the TEHG clarifies that the legacy permits also include a license to release carbon dioxide. The conclusion to be drawn from the statutory framework explained above is 62 unequivocal: The German energy industry operates under a public mandate to ensure cheap and reliable energy supply that also covers the use of fossil fuels. Consequently, carbon dioxide emissions that are the inevitable corollary of energy production with the help of fossil fuels are also covered by public mandate and by special permits issued by the competent authorities. To attach civil liability to activities that were performed under public mandate would amount to a contradiction. c) Violation of the duty of care. In addition to causation, the other key requirement 63 of fault-based liability under Section 823 (1) BGB is negligence. A finding of negligence requires that the tortfeasor failed to exercise reasonable care. This leads to the question whether the emission of greenhouse gases can be classified as negligent, i.e. a breach of the duty of care. Within the doctrinal framework of Section 823 (1) BGB, the duty question is raised 64 under the rubric of the so-called Verkehrspflichten, i.e. duties of care that apply to specific situations. So the first question is whether public utilities and other major sources of carbon dioxide emissions were subject to a duty of care when carrying out their respective industrial activities. Assuming that such a duty exists, it is necessary to determine the scope and intensity of safety measures in answering the question as to what the duty of care requires in a specific situation. A finding of negligence presupposes that operators of power plants and other major 65 industrial facilities that release greenhouse gases into the atmosphere were subject to a duty of care that required to cause less carbon dioxide emissions than they actually caused. But what is the “legal”, i.e. non-negligent amount of carbon dioxide emissions? One answer would be that emission levels must remain low enough so that climate change is averted and no harm is done. A standard of risk-free emissions seems inoperable as the amount of greenhouse gases released by any public utility or other industrial operator in and of itself would never be significant enough to cause any harm. On the other hand, if one supposes that the emissions of an individual facility come on

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Explictly BVerfG, 11.10.1994, 2 BvR 633/86, BVerfGE 91, 186.

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top of all the carbon dioxide that has already been discharged by other sources, then any amount of emissions seems harmful, i.e. “too much”. The standard of care embraced by the German courts when examining the negligence question does not call for risk-free behaviour. As the BGH has repeated several times, a risk-free world is a utopian idea that is unattainable in reality.50 The law of delict does not call for utopia, but for reasonable precautions.51 The potential tortfeasor has to take safety measures that are reasonable under the circumstances. The duty of care is confined to measures that are technically feasible and financially reasonable, meaning that the cost of precautions is not out of proportion to the damage averted by such precaution. The relevant point in time for the negligence determination is the situation ex-ante, i.e. the time of the harmful act. The law does not require more than what the actor should have known and done at the point when he or she decided about his or her course of action. In the present context, a general prohibition to emit greenhouse gases would be utopian, as every human being counts among the emitters of carbon dioxide, simply by breathing. Consequently, operators of power plants or other industrial facilities are not liable simply because they emitted and are still emitting greenhouse gases. In the words of the BGH: A general prohibition to emit greenhouse gases would be utopian. The question remains as to the specific amount of greenhouse gases released by an individual utility or manufacturer that still remains within the boundaries of the duty of care. Where is the point beyond which additional emissions are caused negligently? Here, the same analysis applies that was presented under the rubric of adequate causation. An initial distinction must be drawn between the time before and the time after the harmful effect of an increasing concentration of carbon dioxide in the atmosphere became foreseeable. Prior to the point in time where the risks and causes of climate change became known, a duty to avoid or limit emissions did not exist. Assuming that the time when the climate risk became discernible must be located in the 1990s, this does not mean that emissions after that date automatically deserve the label of carelessness. A standard of zero carbon emissions is utopian. Carbon dioxide emissions are part of the human condition. This is true for the individual who exhales carbon dioxide while breathing, and it applies to corporations that operate facilities that consume energy which was produced with the help of fossil fuels, setting free carbon dioxide in the atmosphere. As long as carbon dioxide emissions remain within the boundaries of social adequacy, no duty has been violated.52 Human populations did and still do rely on the conversion of fossil fuels into electricity and other forms of energy. Any harm sustained by third parties as a consequence of carbon dioxide emissions caused in the course of such activities is inevitable in the sense that there is no duty to prevent such harm from occurring. As far as public utilities are concerned, it must be remembered that they operate under a legal duty to produce electricity efficiently and safely, as enshrined in Section 1 (1) and Section 2 (1) 1 EnWG. Since 2004, the greenhouse gas emissions are regulated in the TEHG, a statute that aims at a gradual reduction of emission levels. The scheme system inaugurated by the TEHG is based on the premise that emissions of greenhouse gases are not illegal or careless per se, given that carbon dioxide is harmless for humans, animals and plants. As evidenced by BGH, 02.10.2012 – VI ZR 311/11, BGHZ 195, 30 para. 7. BGH, 28.06.1965 – III ZR 35/64, BGHZ 44, 103 (106). 52 In fact, the concepts of adequacy as a normative subcategory of causation and the duty of care, cannot be perfectly separated in German law. They both try to strike a balance between the lawful and unlawful conducts with regard to the benefit of the potential tortfeasor and third parties and the risks of the potential victims. 50 51

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Section 1 TEHG the legislator refrained from banning the release of greenhouse gases, but instead opted for gradual limitations, in order to contribute to the global efforts in the protection of the climate.53 The lawfulness of carbon dioxide emissions is confirmed by Section 5 (2) BImSchG which explicitly provides that compliance with the greenhouse gas emissions trading scheme set up by the TEHG automatically satisfies the duties of the operator of an industrial source of emissions under the Clean Air Act.54 The linkage between the greenhouse gas emissions trading scheme and Germany’s 70 Clean Air Act is carried one step further, and into the private law of nuisance. As far as emissions are concerned, the private law relationship between owners of adjacent real estate is governed by Section 906 BGB. This provision distinguishes between emissions that impact the neighbouring property significantly or insignificantly and furthermore between emissions that comport to local custom and others which fall outside of it. Emissions that are lawful under the applicable administrative or regulatory statute must also be held lawful under the private law of nuisance. This link between administrative law and private law and the resulting priority of administrative law is provided for in Section 906 (1) cl. 2 and 3 BGB. “An impairment is generally considered insignificant, if the thresholds laid down in statutes or ordinances are not passed by the impacts determined and evaluated under these provisions. The same accounts for thresholds of administrative regulations, which were enacted according to Section 48 of the Clean Air Act and are meant to reflect the current state of the art.”55 To be sure, Section 906 (1) cl. 2 and 3 BGB only apply to thresholds that serve to 71 protect individuals from harm through toxic emissions.56 This is not the case for carbon dioxide emissions, regulated by the greenhouse gas emissions trading scheme, as the TEHG sets no thresholds of other standards but aims at an overall reduction of carbon dioxide emissions.57 The reason is not that the lawmakers did not take the interests of the neighbours seriously but rather that carbon dioxide is harmless to humans as to other life forms. Any harmful effect of carbon dioxide comes from the aggregate effect of myriads of emissions around the globe over a long time span. In other words, greenhouse gas emissions are less harmful to the neighbours of the source than 53 Vierhaus/von Schweinitz, in: Körner/Vierhaus (eds.): Treibhaus-Emissionshandelsgesetz 2007, § 1 para. 7 et seq. 54 § 5 (2) BImSchG reads: “Soweit genehmigungsbedürftige Anlagen dem Anwendungsbereich des Treibhausgas-Emissionshandelsgesetzes unterliegen, sind Anforderungen zur Begrenzung von Emissionen von Treibhausgasen nur zulässig, um zur Erfüllung der Pflichten nach Absatz 1 Nummer 1 sicherzustellen, dass im Einwirkungsbereich der Anlage keine schädlichen Umwelteinwirkungen entstehen; dies gilt nur für Treibhausgase, die für die betreffende Tätigkeit nach Anhang 1 des Treibhausgas-Emissionshandelsgesetzes umfasst sind. Bei diesen Anlagen dürfen zur Erfüllung der Pflicht zur effizienten Verwendung von Energie in Bezug auf die Emissionen von Kohlendioxid, die auf Verbrennungs- oder anderen Prozessen der Anlage beruhen, keine Anforderungen gestellt werden, die über die Pflichten hinausgehen, welche das Treibhausgas-Emissionshandelsgesetz begründet.” (“Insofar as installations requiring a permit are subject to the scope of application of the Greenhouse Gas Emissions Trading Act, requirements to limit emissions of greenhouse gases shall only be issued to ensure that, in order to fulfil the duties under paragraph 1 number 1, no harmful effects on the environment arise in the sphere of influence of the installation; this shall only apply to greenhouse gases which are included for the relevant activity under Annex 1 of the Greenhouse Gas Emissions Trading Act. For these installations, in order to fulfil the duty to use energy efficiently with regard to emissions of carbon dioxide resulting from combustion or other processes of the installation, no requirements may be imposed which exceed the duties laid down in the Greenhouse Gas Emissions Trading Act.” – Translation by the authors). 55 Translation by the authors. 56 BGH, 10.12.2004, V ZR 72/04, NJW 2005, 660. 57 For a comprehensive analysis, see Wagner, in: Beuthien, Volker (eds.), Festschrift für Dieter Medicus, 1999, 589, (599 et seq.).

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emissions of other chemical agents. Therefore, Section 906 (1) cl. 2 and 3 BGB must be applied to carbon dioxide emissions as well. By establishing that emissions lawful under the applicable administrative statute are considered insignificant under the private law of nuisance (Section 906 BGB) the legislator made it clear that impairments caused by these emissions have to be tolerated by the neighbours of the source without compensation.58 This legislative choice has to be respected and bars courts to interpret the German law delict in general, and Section 823 BGB more specifically in a way that results in a claim for compensation of the impaired neighbour. 72 And what is true for the neighbours of carbon dioxide emitting facilities is all the more true for third parties located at longer distances away from the source. According to the case law of the 6th Civil Senate of the BGH the duties of the emitter are determined by Section 906 BGB also vis-à-vis persons that do not count as neighbours in the strict sense.59 Therefore emissions, that are lawful vis-à-vis land owners, remain so vis-à-vis affected third parties. 73

d) Conclusion: No liability for carbon dioxide emissions under Section 823 (1) BGB. Section 823 (1) BGB provides no basis for a carbon dioxide emissions liability. This is true even for large-scale emitters such as public utilities.60 None of the three standards of attribution that are cumulatively necessary to constitute a delict under Section 823 (1) BGB are met: (1) But-for causation between carbon dioxide emissions and harm to private interests due to adverse weather conditions or other potential effects of climate change cannot be established.61 (2) Moreover, the normative criterion of adequate causation protects emitters from liability to the extent that the production of energy using fossil fuels is covered by a public mandate, is made with a view to the general interest, and was particularly authorized by the competent governmental agencies.62 (3) For the same reasons, the behaviour of the carbon dioxide emitters cannot be classified as a breach of duty of care.63

2. Breach of statutory duty, Section 823 (2) BGB Liability for breach of statutory duty under Section 823 (2) BGB follows the model of Section 823 (1) BGB in introducing fault-based liability for wrongful behaviour. The difference is that wrongfulness does not lie in the infringement of a subjective right of another, but in the violation of a statutory norm. Section 823 (2) BGB does not settle with the mere contravention of a statute but rather requires fault, i.e. intention or negligence. Under Section 823 (2) BGB not any statute suffices but only those that serve a protective purpose.64 75 It seems safe to predict that liability under Section 823 (2) BGB will play only a negligible role in climate change litigation. The statutory framework that regulates greenhouse gas emissions in Germany, the TEHG, does not qualify as a protective norm in the interest of others. It follows a wholesale approach to carbon emissions and supplies a mechanism to limit and then decrease the aggregate amount of discharge of carbon dioxide into the atmosphere. In doing so, it aims at preserving the global 74

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Critique in Wagner, NJW 1991, 3247. BGH, 18.9.1984, VI ZR 223/82, NJW 1985, 47. 60 According to the seminal study of Richard Heede, the greatest share of the worldwide carbon dioxide emissions since 1750 by a single actor can be attributed to Saudi Aramco with 59,262 metric tons of carbon dioxide or 4.38 % of total emissions. 61 See supra, p. 14 et seq. 62 See supra, p. 17 et seq. 63 See supra, p. 22 et seq. 64 Supra, p. 6. 59

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climate, but not at protecting certain individuals who stand to suffer damage as a consequence of shifts in climate conditions.65 Other statutory rules that explicitly prohibit the emission of carbon dioxide with a view to protect individuals do not exist.

3. Actio doli, Section 826 BGB Liability under the actio doli enshrined in Section 826 BGB requires that the 76 wrongdoer acted against good morals and with intention to cause harm to another. These two requirements will never be satisfied by operators of facilities that release carbon dioxide as a by-product of industrial activity. In particular, the release of carbon dioxide does not qualify as immoral behaviour. The energy industry, in particular, runs its business with a view to satisfy the public’s energy needs, not with the goal of hurting anyone.66

IV. Strict liability German law provides a strict liability in the Umwelthaftungsgesetz (German Environ- 77 mental Liability Act) which is further developed elsewhere in this book (infra, Chapter 19). In any event, it only applies to emissions that occurred after its entry into force on 1 January 1991,67 and it requires the infringement of a protected interest, namely life, health, bodily integrity, and private property. As far as pure ecological damage is concerned, the Environmental Damage Act 78 (Umweltschadensgesetz – USchadG) provides a remedy, albeit one of administrative law nature (infra, Part 5, X.).

V. Law of nuisance Next to the law of delict and strict liability, the law of nuisance is the third pillar of 79 the German liability system and another option for victims whose interests were adversely affected by the changing climate. In contrast to the other two branches of the liability system its focus is primarily, albeit not exclusively, on prevention of imminent harm, not on compensation of harm that occurred already.

1. Actio negatoria, Section 1004 BGB a) Overview. Section 1004 BGB follows the tradition of Roman law and enshrines the 80 successor to the classic actio negatoria. It entitles the owner of a property interest to prevent the impairment of his or her rights through remedies that resemble injunctions. The owner may seek a court order that requires the wrongdoer to terminate the harmful activity or to refrain from engaging in it in the first place,68 and to remove the source of the impairment.69 Even though Section 1004 BGB is part of the property law and remains limited to 81 property interests it has been developed into a general clause that protects subjective See supra, p. 24, and Körner/Vierhaus/v. Schweinitz, TEHG § 1 para. 7 et seq. A further complication would be that in corporate contexts the BGH requires the two subjective elements to be present in one single natural person, see BGH, 28.06.2016, VI ZR 536/15, NJW 2017, 250. 67 Hager, in: Landmann/Rohmer (eds.), Umweltrecht, 91st ed. 2020, § 23 para. 1. 68 BGH, 19.6.1951, I ZR 77/50, NJW 1951, 843. 69 Inter alia Herrler, in: Palandt – Bürgerliches Gesetzbuch, 79th ed. 2020, BGB § 1004 para. 27, 31. 65 66

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rights in general and even other legal entitlements from infringement. Thus, everything that can be said about the protection of property interests applies mutatis mutandis to the rights to life, health, bodily integrity, freedom of movement as well. 82 The elements of a claim under Section 1004 BGB are (1) the impairment of a subjective right, (2) adequate causation and, at least in some cases, (3) breach of duty. Obviously, all of these requirements are familiar from the law of delict. 83

b) The responsible parties under nuisance law. Traditional case law in German nuisance law distinguishes between two different types of respondents:70 (1) Someone whose own property causes the impairment of another is classified as a so-called infringer by condition (Zustandsstörer). (2) Someone who causes an impairment through his own actions is classified as and infringer by conduct (Handlungsstörer).

aa) Infringement by condition (Zustandsstörung). Infringement by condition (Zustandsstörung) requires that the respondent is the equitable owner of a piece of property that causes or threatens to cause the impairment of another. However, liability as infringer by condition requires that the harmful condition of the respondent’s property may be traced back to his or her wilful behaviour. There is no liability for pure forces of nature that operate regardless of human actions and omissions.71 85 In the normal case, the legal owner of the object in question is in charge of the thing and thus bears responsibility for its harmful condition. However, there is no necessary link between legal ownership and liability. The person responsible for the condition of an object under Section 1004 BGB is the one exercising de-facto control over it, regardless of legal ownership.72 86 It is important to note that the category of infringement by condition remains limited to the objects that the respondent has under his or her control. Section 1004 BGB does not create any responsibility for the condition of other property that is outside of the control of the respondent. Imagine, for example, that rising temperatures change the condition of land high up in the mountains and thereby create a source of danger, be it a rock that may cut loose and run down into the valley, be it the accumulation of water in a lake that may break free and cause a serious flood. Clearly, there is no responsibility by condition on the part of an entity that arguably helped to cause the rise in temperatures through emissions of carbon dioxide. The simple reason for this conclusion is that the emitter has no control over the mountainous land from which the risk emanates. In plain language, the emitter of carbon dioxide is not the infringer by condition (Zustandsstörer) with respect to the land that impairs or threatens to impair the property of another. 84

bb) Infringement by conduct (Verhaltensstörung). Liability for infringement by conduct (Verhaltensstörung) requires that the respondent adequately caused the impairment of property through his or her own behaviour, be it an act or an omission contrary to a duty to act.73 In light of the analysis presented above, it will not be possible to establish a causal link between a particular infringement or threat thereof and the carbon dioxide emissions of any corporation, even if it counts among the major emitters.74 88 When applying Section 1004 BGB, the courts distinguish between direct and indirect impairment.75 While behaviour that directly infringes the rights of another is actionable 87

MünchKomm-Raff, 8th ed. 2020, BGB § 1004 para. 157 et seq. BGH, 16.2.2001, V ZR 422/99, NJW-RR 2001, 1208. 72 BGH, 18.12.2015, V ZR 160/14, NJW 2016, 863. 73 BGH, 1.12.2006, V ZR 112/06, NJW 2007, 432. 74 Supra, p. 14 et seq. 75 BGH, 24.11.1967, V ZR 196/65. 70 71

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without more, this is not the case with behaviour that infringes only indirectly, i.e. through a chain of events that may include forces of nature and acts of third parties.76 The distinction between direct and indirect infringement is important and relevant because the BGH requires additional elements for holding a party liable for indirect impairment. While the direct infringer shall be liable simply for having caused or threatening to cause the impairment, the liability of the indirect infringer is contingent on two elements that are already familiar from the analysis of the law of delict, namely adequate causation and breach of duty. The BGH has tried to distinguish the duty developed under Section 1004 BGB, calling it a “duty of safety” (Sicherungspflicht), from the duty of care known from the law of delict,77 but the difference has not become entirely clear. What is clear, however, is that the duty of safety serves the same purpose as the duty of care, namely to attribute responsibility for a certain harm to an individual actor. For the same reasons that were developed in the discussion of liability under the law 89 of delict, large-scale emitters of carbon dioxide cannot be held responsible for impairment of property rights and other entitlements under the law of nuisance either.78 In normal circumstances, carbon emissions do not even satisfy the but-for test. But even if they did, they cannot be categorized as adequate causes of climate change damage. Furthermore, the emission of carbon dioxide in the course of industrial processes that are designed to meet the demand of the general public for electricity and that take place under the collar of regulatory energy law, does not breach any duty, be it a duty of care or a duty of safety. c) Illegality. Pursuant to Section 1004 (2) BGB, the claim to cease and desist from 90 any (further) infringements of private property and other entitlements does not lie where the party whose rights are negatively affected is legally bound to tolerate the nuisance. It has already been mentioned that Section 906 (1) BGB creates a duty to tolerate emissions that cause only minor disturbances, and that emissions which comply with administrative-law standards are deemed to cause only such minor disturbances.79 In addition, any claims to cease and desist based on the private law of nuisance are specifically excluded by statute where the source of emissions was licensed by the government under the applicable administrative law rules (Section 14 cl. 1 BImSchG and its predecessor statute). Virtually all industrial facilities that release significant amounts of carbon dioxide into the atmosphere operate under such licenses and are thus immune from law suits based on private law. This also applies to victims situated at long distance from the facility that allegedly caused the harm in question. d) The nature of the remedy. Even if, contrary to the above analysis, major emitters 91 of carbon dioxide were liable under Section 1004 BGB, the remedy would be limited. Section 1004 BGB creates an obligation of the responsible party to cease and desist, i.e. to discontinue the activity that causes the impairment. It does not create a claim for money damages. In the case against RWE, recounted above,80 the claimant argues that a chain of 92 events was set in motion by the respondent that threatens to damage his property in the future. Obviously, even if the respondent reduced its carbon dioxide emissions today or even terminated the use of fossil fuels altogether, this would not eliminate the alleged 76 BGH, 17.9.2004, V ZR 230/03, NJW 1968, 1281; AG Karlsruhe, 27.3.1991, 8 C 123/91, NJW-RR 1992, 463; cf Palandt-Herrler, BGB § 1004 para. 18. 77 BGH, 20.9.2019, V ZR 218/18, NJW 2020, 607. 78 Supra, p. 22. 79 Supra, p. 23 et seq. 80 Supra, p. 8 et seq.

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risk to the claimant’s real estate. Thus, the claim is directed at active measures by the respondent to fend off the risk that allegedly is imminent. This could be achieved by safety installations against floods, such as dehydration pipes, dams and the like. 93 In exceptional cases, the BGH allows the party whose rights are being impinged upon, to take protective measures him- or herself, and then to seek reimbursement for any costs incurred from the responsible party. Such claim for quasi-damages is based on unjust enrichment under Section 812 BGB and negotiorum gestio (Sections 683, 670 BGB).81 This line of jurisprudence by the BGH has attracted criticism of commentators who argue that the court essentially allows the claimant to self-execute his or her claim to cease and desist and to prevent further harm from materializing.82 In addition, the self-remedy created by the BGH deprives the responsible party of its freedom to decide for itself as to how to prevent further harm and to choose the most cost-effective measures. 94 Even if one accepts the jurisprudence of the BGH, it does help the claimant in cases like the one involving RWE where the claimant has not initiated any protective measures as of yet but nonetheless launches a money claim. While the case law does provide a legal basis for claims for reimbursement of costs incurred, it does not provide a right to an advance payment for costs that allegedly will be incurred in the future.83 95

e) Conclusion. The law of delict and the law of nuisance travel in separate legal compartments. Nonetheless, the elements of claims in delict and in nuisance, respectively, overlap to a large extent. As a consequence, claims in nuisance founder for the same reasons as claims in delict: Current emitters of carbon dioxide did not cause the harm in question, and they did not act in breach of duty. Furthermore, claims to cease and desist brought against the operators of industrial facilities are excluded by statute. Finally, nuisance cannot be used as a basis for claiming the payment of an advance on costs for protective measures to be implemented subsequently.

2. Section 906 (2) cl. 2 BGB and Section 14 cl. 2 BImSchG The German law of nuisance is not only concerned with cease and desist remedies but also grants rights to compensation, even on a no-fault basis. The normative principle supporting these claims is related to notions of necessity. The idea is that a private party who is forced to sacrifice his or her own entitlements for the common good or even for the prevailing interests of another, must be entitled to compensation. This is the so-called Aufopferungshaftung that covers infringements that are lawful but place an unreasonable burden on the disadvantaged party so that equity demands some sort of compensation.84 97 One emanation of liability for lawful interference is Section 906 (2) cl. 2 BGB. Section 906 (2) cl. 2 BGB holds a party liable that causes emissions which are significant but nonetheless comply with local custom, provided that the emissions prevent or impair the reasonable use of neighbouring land. While the principle of liability between neighbours may sound promising, it holds no water for victims of climate change. The simple reason is that Section 906 (2) cl. 2 BGB is confined to those people and corporations who are situated next to the facility that causes the emissions. Even though neighbourhood in the sense of the provision does not require that the claimant and the 96

81 BGH, 4.2.2005, V ZR 142/04, NJW 2005, 1366 (1367); for a comprehensive overview see Gursky, in: Staudinger – Kommentar zum Bürgerlichen Gesetzbuch, 2012, BGB § 1004 mn. 159. 82 Inter alia Gursky, NJW 1971, 782 (784 et seq.). 83 BGH, 21.4.1989, V ZR 248/87, NJW 1989, 2541; Palandt-Herrler, BGB § 1004 mn. 30. 84 Deutsch, Allgemeines Haftungsrecht, 2nd ed. 1996, para. 716 et seq.; Staudinger-Roth, 2016, BGB § 906, para. 66 et seq.

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respondent are sharing the garden fence, the concept of neighbourhood is not boundless but focussed on a local area.85 In other words, Section 906 (2) cl. 2 BGB does not reach property owners who are a long distance away from the source of the emissions. The same analysis applies to similar claims created by the German Clean Air Act. As 98 explained above, Section 14 cl. 1 BImSchG specifically excludes claims to cease and desist brought against industrial facilities that are operated under collar of a public permit.86 The same statute that imposes a duty to tolerate industrial facilities which are subject to a government permit also creates a right to compensation for the benefit of the party whose property rights are impinged upon (Section 14 cl. 2 BImSchG). However, these compensatory remedies are limited to victims in the “neighbourhood” of the facility that causes the impairment.87 The concept of neighbourhood must not be understood in the colloquial sense, as it is a term of art. According to the jurisprudence of the Federal Administrative Court (Bundesverwaltungsgericht – BVerwG) the concept of neighbour requires that a person is exposed to a “qualified impact which substantially deviates from an impact that affects individuals as part of the general public” and that the person is in “a close spatial and temporal relationship with the facility that was licensed.”88 As a consequence, victims of global warming do not qualify as neighbours of industrial facilities operated in Germany. Global warming is a global phenomenon that affects people who are by no means in a “close spatial and temporal relationship” with the industrial facility that causes emissions of carbon dioxide. The BImSchG does not protect each and every human being and corporation around the globe against harm caused by the emissions of a licensed facility. As a result, Section 14 cl. 2 BImSchG cannot be enforced against emitters of carbon dioxide. If interpreted otherwise, the German law of nuisance would offer no-fault liability to any entity on earth for harm indirectly caused by industrial plants and facilities operated in Germany. This proposition is absurd and does not represent the state of the law.

VI. Conclusion As a brief survey of German law has revealed, its potential for victims of climate 99 change is limited. In a nutshell, causation and a breach of duty cannot be established, eliminating all liabilities of potential respondents. The obstacles standing in the way of large-scale liability even of major emitters of 100 carbon dioxide are not idiosyncratic to the German legal system. Rather, they count among the usual suspects that stand in the way of successful climate change litigation against private parties, regardless of where the cases are filed. In the normal scenario it will be impossible to establish a causal link between certain quantities of carbon dioxide, released into the atmosphere by the operator of a power plant or other industrial facility, and the harm suffered by another party who is situated a long distance away from the source of the emissions. Furthermore, and this is the second major obstacle, carbon emissions are not illegal, i.e. they never were and never will be. Every human being emits carbon dioxide simply by breathing, and many human activities are impossible without carbon emissions. The real question is not a duty to avoid carbon dioxide emissions altogether but to minimize them. Given the global scale of the problem, the solution must also be global. Efforts at reducing the quantity of carbon OLG Düsseldorf, 09.7.2012 – I-9 U 138/11, BauR 2012, 1979. Supra, p. 30 et seq. 87 Pöttker, supra (fn. 18), 90 et seq. 88 BVerwG, 22.10.1982, 7 C 50/78, NJW 1983, 1507 – Translation by the authors. 85 86

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dioxide emissions must encompass all major sources on the planet and also factor in remedial measures and compensation in kind. The duty of care, as it has been developed and operated by the law of noncontractual liability is ill-suited for a global, coordinated and concerted approach to global warming. It forces an either/or-decision on the problem of climate change, while what is needed is a proportionate remedy that provides genuine incentives to reduce the quantity of greenhouse gas emissions. The emission rights trading scheme, agreed in Kyoto, and transposed into German law is the adequate response. Tort law is not.

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U. Liability for climate change damages under the German Environmental Liability Act Bibliography: Ahrens, Außervertragliche Haftung wegen der Emission genehmigter Treibhausgase?, VersR 2019, 645; Brüggemann, Zivilrechtliche Umwelthaftung in Frankreich und Deutschland, 2009, 134; Burtscher/ Spitzer, Haftung für Klimaschäden, ÖJZ 2017/134; Burtscher/Spitzer, Liability for Climate Change: Cases, Challenges and Concepts, JETL 2017, 137; Chatzinerantzis/Appel, Haftung für den Klimawandel, NJW 2019, 881; Chatzinerantzis/Herz, Climate Change Litigation – Der Klimawandel im Spiegel des Haftungsrechts, NJOZ 2010, 594; Colombo, Enforcing International Climate Change Law in Domestic Courts: A New Trend of Cases for Boosting Principle 10 of the Rio Declaration?, UCLA Journal of Environmental Law and Policy 2017, 98; De Graaf/Jans, The Urgenda Decision: Netherlands Liable for Role in Causing Dangerous Global Climate Change, Journal of Environmental Law 2015, 517: Deutsch, Umwelthaftung: Theorie und Grundsätze, JZ 1991, 1097; Diederichsen/Wagner, Das Umwelthaftungsgesetz zwischen gesetzgeberischer Intention und interpretatorischer Phantasie, VersR 1993, 641; Ferreira, “Common But Differentiated Responsibilities” in the National Courts: Lessons from Urgenda v. The Netherlands, Transnational Environmental Law 2016, 329; Frank, Aspekte zur Risikobewertung beim Eigentumsschutz gem. § 1004 BGB am Beispiel der Klimaklage eines peruanischen Bauern gegen RWE, ZUR 2019, 518; Frank, Klimawandel – auch juristisch keine Blackbox, NVwZ 2018, 960; Frank, Climate Change Litigation – Klimawandel und haftungsrechtliche Risiken – Erwiderung auf Chatzinerantzis/Herz, NJOZ 2010, 2296; Frank, Klimahaftung und Kausalität, ZUR 2013, 28; Hager in: Landmann/Rohmer (eds.), Umweltrecht, Kommentierung des UmweltHG; Hoegh‐Guldberg/Jacob/Taylor/Bindi/Brown/Camilloni/Diedhiou/Djalante/Ebi/Engelbrecht/Guiot/ Hijioka/Mehrotra/Payne/Seneviratne/Thomas/Warren/Zhou, Impacts of 1.5ºC Global Warming on Natural and Human Systems in Masson-Delmotte/Zhai/Pörtner/Roberts/Skea/Shukla/Pirani/Moufouma-Okia/Péan/ Pidcock/Connors/Matthews/Chen/Zhou/Gomis/Lonnoy/Maycock/Tignor/Waterfield (eds.), Global Warming of 1.5°C. An IPCC Special Report on the impacts of global warming of 1.5°C above pre-industrial levels and related global greenhouse gas emission pathways, in the context of strengthening the global response to the threat of climate change, sustainable development, and efforts to eradicate poverty, 2018, 177–284; Karner, Klimasünder schadenersatzrechtlich zur Verantwortung ziehen? APA Science Dossier vom 28.3.2019; Keller/ Kapoor, Climate Change Litigation – zivilrechtliche Haftung für Treibhausgasemissionen, BB 2019, 706; Kohler in: Staudinger (ed.), Kommentar zum Bürgerlichen Gesetzbuch, 2017, Kommentierung des UmweltHG; Koziol, Basic Questions of Tort Law from a Germanic Perspective, 2012; Landsberg/Lülling, Umwelthaftungsrecht, 1991, Kommentierung des UmweltHG; Larenz/Canaris, Schuldrecht Besonderer Teil; Bydlinski, Probleme der Schadensverursachung, 1964; Nitsch in: BeckOGK, Kommentierung des UmweltHG; Paschke, Kommentar zum Umwelthaftungsgesetz, 1993; Rehbinder in: Landmann/Rohmer (eds.), Umweltrecht, Kommentierung des UmweltHG; Roy/Woerdman, Situating Urgenda v the Netherlands within comparative climate change litigation, Journal of Energy & Natural Resources Law, 2016, 165; Salje/Peter (eds.), Kommentar zum Umwelthaftungsgesetz, 2nd ed., 2005; Saurer, Klimaschutz global, europäisch, national – Was ist rechtlich verbindlich?; NVwZ 2017, 1574; Saurer, Strukturen gerichtlicher Kontrolle im Klimaschutzrecht – Eine rechtsvergleichende Analyse, ZUR 2018, 679; Schmidt-Salzer, Kommentar zum Umwelthaftungsrecht, 1992, Kommentierung des UmweltHG; Spickhoff/Riedhammer in: Soergel (ed.), Kommentar zum BGB, vol. 12, 13th ed., 2005, Kommentierung des UmweltHG; Spitzer in: Huber/ Neumayr/Reisinger (eds.), Festschrift Danzl, Der Klimawandel als juristische Kategorie – Internationale Perspektiven, 2017, 655; Van Zeben, Establishing a Governmental Duty of Care for Climate Change Mitigation: Will Urgenda Turn the Tide?, Transnational Environmental Law, 2015, 339; Verheyen/Lührs, Klimaschutz durch Gerichte in den USA, ZUR 2009, 73, 129; Wagner in: Münchener Kommentar zum BGB, 7th ed., 2017, Kommentierung des § 823 BGB; Wegener, Urgenda – Weltrettung per Gerichtsbeschluss?, ZUR 2019, 3.

I. II. III. IV.

Contents Introduction ..................................................................................................... Basic principles of the UmweltHG ............................................................. Nature of liability............................................................................................ Facilities subject to the UmweltHG............................................................ 1. Basic principles............................................................................................ 2. Annex 1 catalogue ......................................................................................

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Part 5. Liability for climate damages – Germany as an international pioneer? V. Damages subject to the UmweltHG ........................................................... 1. Basic principles............................................................................................ 2. Climate change damages subject to the UmweltHG? ........................ VI. Environmental impact ................................................................................... 1. Basic principles............................................................................................ 2. Environmental impact in the form of climate change....................... VII. Causation .......................................................................................................... 1. Basic principles............................................................................................ 2. Presumption of causation ......................................................................... 3. Causation in cases of climate change damages ................................... VIII. Temporal scope of application .................................................................... IX. Conclusion........................................................................................................

21 21 23 28 28 32 34 34 43 47 55 56

I. Introduction To an increasing extent, over the last years climate change damages are being litigated before courts; e.g. Urgenda v. the Netherlands, Leghari v. the Federation of Pakistan, Youth v. the U.S. Government, Friends of the Earth Germany, Association of Solar Supporters and Others v. the German Government, Family Farmers and Greenpeace Germany v. the German Government.1 Considering this development, one can speak of a worldwide movement, which, under the common slogan of ‘Climate Justice’, is endeavouring to use the judicial power as an instrument for correcting political inactivity.2 2 The majority of lawsuits are filed against governments. However, 10 lawsuits were filed against European corporations or individuals.3 From a German perspective, the claim of a Peruvian farmer against the German energy company RWE AG is particularly remarkable.4 For this reason, it is worth considering the potential of claims in light of German civil law. Whether for individuals an increased risk of liability exists is 1

1 For an overview cf: Sabin Center for Climate Change Law: http://climatecasechart.com/ ; Chatzinerantzis/Appel, Haftung für den Klimawandel, NJW 2019, 881; Wegener, Urgenda – Weltrettung per Gerichtsbeschluss?, ZUR 2019, 3; Frank, Klimawandel – auch juristisch keine Blackbox, NVwZ 2018, 960; Saurer, Strukturen gerichtlicher Kontrolle im Klimaschutzrecht – Eine rechtsvergleichende Analyse, ZUR 2018, 679; Saurer, Klimaschutz global, europäisch, national – Was ist rechtlich verbindlich?, NVwZ 2017, 1574 (1576); Burtscher/Spitzer, Liability for Climate Change: Cases, Challenges and Concepts, JETL 2017, 137; Burtscher/Spitzer, Haftung für Klimaschäden, ÖJZ 2017/134; Chatzinerantzis/Herz, Climate Change Litigation – Der Klimawandel im Spiegel des Haftungsrechts, NJOZ 2010, 594; Verheyen/Lührs, Klimaschutz durch Gerichte in den USA, ZUR 2009, 73, 129. 2 Wegener, ZUR 2019, 3 (6); Colombo, Enforcing International Climate Change Law in Domestic Courts: A New Trend of Cases for Boosting Principle 10 of the Rio Declaration?, UCLA Journal of Environmental Law and Policy 2017, 98 et seq.; De Graaf/Jans, The Urgenda Decision: Netherlands Liable for Role in Causing Dangerous Global Climate Change, Journal of Environmental Law 2015, 517 et seq.; Ferreira, “Common But Differentiated Responsibilities” in the National Courts: Lessons from Urgenda v. The Netherlands, Transnational Environmental Law 2016, 329 et seq.; Roy/Woerdman, Situating Urgenda v the Netherlands within comparative climate change litigation, Journal of Energy & Natural Resources Law, 2016, 165–189; Van Zeben, Establishing a Governmental Duty of Care for Climate Change Mitigation: Will Urgenda Turn the Tide? Transnational Environmental Law 2015, 339–357. 3 Complaint against BP in respect of violations of the OECD Guidelines, jurisdiction: UK; Friends of the Earth et al v. Total, jurisdiction: France, Notre Affaire à Tous and Others v. Total, jurisdiction: France; ClientEarth v. Polska Grupa Energetyczna, jurisdiction: Poland; Milieudefensie et al. v. Royal Dutch Shell plc., jurisdiction: Netherland; ClientEarth v. Enea, jurisdiction: Poland; Lliuya v. RWE AG, jurisdiction: Germany; Grainger Plc and Others v. Nicholson, jurisdiction: UK; Deutsche Bank AG v. Total Global Steel Ltd., jurisdiction: Germany; CF Partners (UK) LLP v. Barclays Bank PLC, jurisdiction: UK; For Non-U.S. climate change litigation cf: http://climatecasechart.com/non-us-case-category/corporations/. 4 Lliuya v. RWE AG, for an unofficial English translation cf Menz/Giardrossi/Colombo: http://blogs2. law.columbia.edu/climate-change-litigation/wp-content/uploads/sites/16/non-us-case-documents/2017/ 20171211_Case-No.-2-O-28515-Essen-Regional-Court_order-1.pdf.

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controversial. According to the majority of the German legal scholars, plaintiffs are unlikely to prove the prerequisites of German liability law.5 According to another part of the German doctrine, liability can be argued successfully.6 This present chapter examines liability under the German Environmental Liability Act (Umwelthaftungsgesetz – hereinafter referred to as ‘UmweltHG’7).

II. Basic principles of the UmweltHG The UmweltHG governs the compensation for damages resulting from an environ- 3 mental impact caused by specific facilities listed in Annex 1. As a provision of environmental law, it covers damages resulting from an environmental impact. In its capacity as a concept of civil law liability, the main focus lies on the compensation of individual damages. Thus, if a person is killed, or experiences personal injury or property damage as a result of an environmental impact emanating from a facility listed in Annex 1, the operator of the facility can be held liable for the resulting damage. Super individual damage, such as damage to the environment itself and therefore purely ecological damage, does not fall under the scope of application. Thus, the climate itself is not protected directly.8 Nevertheless, an environmental impact is precondition for a claim for compensation based on the UmweltHG. In light of this precondition, the UmweltHG takes measures towards environmental preventive care.9 In its capacity as a provision of strict liability, liability under the UmweltHG is independent of unlawful conduct and fault. Since the UmweltHG applies only on damages caused by specific facilities listed in Annex 1, which bear a higher risk of causing damage, the UmweltHG provides for a strict liability based on dangerousness (Gefährdungshaftung). Not only sudden events associated with the operation of a facility, but also gradual, continuous impacts can give rise to liability under the UmweltHG.10 Since climate change is caused by a continuous release of pollutants this is important when it comes to climate change litigation. The precondition of damage caused by environmental impact is defined in 4 Section 3 (1) UmweltHG: accordingly, such damage is to be assumed if it is caused by substances, vibrations, noises, pressure, radiation, gases, vapours, heat or other phenomena which have spread in soil, air or water. The presumption of causation set out in Section 6 UmweltHG leads to an additional 5 intensification of liability. To balance this intensification, the obligation to pay compensation shall not apply to damages, which were caused by force majeure. In accordance with Section 5 UmweltHG, the operator of the facility is not liable for damage to property in the event of damage caused by authorisation-compliant operation if the object is impaired only insignificantly or to an extent that is reasonable 5 Ahrens, Außervertragliche Haftung wegen der Emission genehmigter Treibhausgase?, VersR 2019, 645; Keller/Kapoor, Climate Change Litigation – zivilrechtliche Haftung für Treibhausgasemissionen, BB 2019, 706; Chatzinerantzis/Appel, NJW 2019, 881; Chatzinerantzis/Herz, NJOZ 2010, 594. 6 Frank, Aspekte zur Risikobewertung beim Eigentumsschutz gem. § 1004 BGB am Beispiel der Klimaklage eines peruanischen Bauern gegen RWE, ZUR 2019, 518; Frank, NVwZ 2018, 960; Frank, Klimahaftung und Kausalität, ZUR 2013, 28; Frank, Climate Change Litigation – Klimawandel und haftungsrechtliche Risiken – Erwiderung auf Chatzinerantzis/Herz, NJOZ 2010, 2296. 7 Umwelthaftungsgesetz (UmweltHG) 10.12.1990, BGBl. 1990 I 2634. 8 Cf Wagner in: Münchener Kommentar zum BGB, 7th ed., 2017, BGB § 823 mn. 884, Chatzinerantzis/ Herz, NJOZ 2010, 594. 9 BT‐Drs. 11/7104, 1. 10 Rehbinder in: Landmann/Rohmer (eds.), Umweltrecht § 1 UmweltHG mn. 17; Nitsch in: BeckOGK, § 1 UmweltHG mn. 58.

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according to local conditions. Furthermore, in a case of damage caused by a permitconform operation, the presumption of causation set out in Section 6 does not apply. According to Sections 8–10 UmweltHG, the injured party is entitled to receive information from either the operator of the facility or the authorities. If there is a reasonable belief that a facility has caused damage, the injured party can request information from the operator of the facility to the extent necessary to verify if a claim for compensation under the UmweltHG can be substantiated (Section 9 UmweltHG). The injured party may only request information on the equipment used, the type and concentration of the substances used or released and the effects otherwise emanating from the facility as well as special operating regulations under public law. In case of conflicting confidentiality interests, the right to information shall not apply. Secondly, a right to information against authorities is granted (Section 9 UmweltHG). The claim may be brought against those authorities that have approved or supervise the facility or whose task it is to record impacts on the environment. The authority is not obliged to provide the information if it would interfere with the proper performance of the authority’s duties, if the disclosure of the contents of the information would be detrimental to welfare or if the processes must be kept secret under the law or by their very nature. Thirdly, the operator of a facility is also entitled to request information (Section 10 UmweltHG). If a claim is brought against a facility on the basis of the UmweltHG, the operator may request information from the injured party, from the operator of another facility or from the authorities referred to in Section 9 UmweltHG. The operator is entitled to information to the extent necessary to determine the extent of his obligation to compensate the injured party or his claim for compensation against another operator. The scope of the obligation to pay compensation based on the UmweltHG is largely regulated in line with the standards of Sections 249 et seq. German Civil Code (Bürgerliches Gesetzbuch – hereinafter referred to as ‘BGB’) and Sections 842 et seq. BGB. In the event of death, according to Section 12 UmweltHG, the obligation to pay compensation includes the costs of an attempted medical treatment, damages for pain and suffering, loss in income due to disability or reduction in earning capacity, and an increase in needs calculated up to the time of the injured party’s death. In addition, compensation is awarded to those who bear the funeral costs and who were legally entitled to alimony from the deceased. Relatives or close friends who at the time of the fatal injury had a particular personal relationship with the injured party are entitled to compensation for the mental suffering inflicted upon them in the form of bereavement. According to Section 13 UmweltHG, personal injury entitles the injured party to compensation for the medical expenses, damages for pain and suffering, loss in income due to disability or reduction in earning capacity, and an increase in needs. Deviations from Sections 249 et seq. BGB and Sections 842 et seq. BGB exist with regard to compensation in the event of damage to goods and objects. As mentioned above, there is no liability for insignificant or reasonable damage according to local conditions if the facility was operated in accordance with its permit. If damage to property also results in damage to nature or landscape, according to Section 16 UmweltHG, the costs of an in rem restitution are not disproportionate solely because they exceed the value of the property. This is of importance since under the general provision of Section 251 (2) BGB an in rem restitution that can be achieved only with disproportionate effort is denied. Section 15 UmweltHG stipulates the limitation of liability sum. Liability for death, personal injury or damage to health, and, liability for damage to goods and objects, is limited to a total of EUR 85 million if the damage results from a uniform environmental 432

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impact. Section 15 UmweltHG stipulates a proportionate reduction in the event of a total loss that exceeds the maximum liability. According to Section 18 (1) UmweltHG, liability based on other provisions remains 10 unaffected by the application of the UmweltHG (cf Part 4, S.). Facilities listed in Annex 2 are subject to mandatory insurance. Sections 21 et seq. UmweltHG implement administrative penalties and fines. In addition to facilitating damage compensation, improving the legal position of 11 injured parties and closing loopholes, the UmweltHG aims to have an impact on the conduct of operators of facilities. The risk of a future obligation to compensate shall induce operators of relevant facilities to cautious, damage-preventing conduct.11 The UmweltHG herewith serves the protection of the environment and is a legislative reaction to a sharpened environmental awareness.12 The idea of prevention was even the primary objective when Germany passed the law. The explanatory notes of the German Bundestag (Drucksachen des Deutschen Bundestages – hereinafter referred to as ‘BT‐Drs.’13) emphasise that the function of the UmweltHG is not only to compensate damage but also to serve as a preventive measure.14 It does not only aim to raise awareness of the environment but also enforces its protection. It follows from this objective of the law that the UmweltHG entitles to preventive injunctions. However, an injunction shall not jeopardise the authorised operation.15

III. Nature of liability The UmweltHG stipulates a strict liability for individual injury (death, damage to 12 body or health, damage to goods and objects) resulting from an environmental impact caused by a facility listed in Annex 1.16 In operating facilities listed in Annex 1, the German legislator anticipated a threat that was considered to justify a strict liability based on dangerousness. According to this type of liability, an abstract operational risk of a facility is decisive. There is no differentiation being made as to whether damage was caused by one-time events or long-time emissions, or by permit-conform or permitexceeding operation. Neither objective carelessness nor subjective fault are prerequisites for a claim. Compliance with all operational authorisations does not automatically release from 13 liability. Consequently, the operator of a facility cannot argue compliance with a permit to avoid liability. However, it is necessary to differentiate between permit-conform and permit-exceeding operation, since according to Section 6 UmweltHG, permit-conform operation causes the presumption of causation to cease to apply. In conformity with Section 5 UmweltHG, permit-conform operation does not constitute liability if the object is impaired only insignificantly or to an extent that is reasonable under local conditions.

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BT‐Drs. 11/7104. Kohler in: Staudinger (ed.), Kommentar zum Bürgerlichen Gesetzbuch, 2017, § 1 UmweltHG mn. 1; Nitsch in: BeckOGK, § 1 UmweltHG mn. 4. 13 https://www.bundestag.de/drucksachen. 14 BT‐Drs. 11/4247, 15. 15 Spickhoff/Riedhammer in: Soergel (ed.), Kommentar zum BGB, vol. 12, 13th ed., 2005, Vor § 1 mn. 3; Kohler in: Staudinger (ed.), § 1 UmweltHG mn. 4; Nitsch in: BeckOGK, § 1 UmweltHG mn. 5. 16 Diederichsen/Wagner, Das Umwelthaftungsgesetz zwischen gesetzgeberischer Intention und interpretatorischer Phantasie, VersR 1993, 641. 12

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IV. Facilities subject to the UmweltHG 1. Basic principles The UmweltHG applies to specific facilities listed in Annex 1. The term facility is defined by Sections 3 (2) and (3) UmweltHG. Distinction is made between stationary, mobile and ancillary facilities. 15 Pursuant to Section 3 (2) UmweltHG, stationary facilities are facilities, such as permanent operating facilities and storage facilities associated with such. Thus, stationary stability is required. This criterion is fulfilled if the facility is permanently attached to the ground. A broad scope is applied for stationary facilities. Thus, also property which is used as storage area, is qualified as a stationary facility.17 16 Mobile facilities such as machinery, equipment, vehicles and other mobile technical facilities and ancillary facilities are considered to be affiliated to a facility if they are territorially or operationally connected. In addition, such affiliation depends on whether the mobile or ancillary facilities could be of significance for environmental impact or not. For example, the following mobile facilities are considered to be subject to the UmweltHG: tank trucks or tankers18 and vehicles used for internal transport.19 Examples of ancillary facilities are engine rooms, material storages, waste, packaging and loading facilities, emergency power generators and emergency cooling equipment and pipelines.20 Lacking significance for environmental impact a staff cafeteria or vehicles carrying employees are not classified as facilities subject to the UmweltHG.21 14

2. Annex 1 catalogue The German legislator decided against an abstract description of the covered facilities. Instead, Annex 1 contains an exhaustive list of the facilities that are subject to liability under the UmweltHG. The liability applies to installations that are particularly apt to cause harmful environmental impacts or otherwise endanger the general public or the neighbourhood.22 For liability under Section 1 UmweltHG, it is not decisive whether the specific risk immanent to the facility has materialised.23 Although the specific risk was the decisive factor for the addition to the catalogue of facilities in Annex 1, liability is not limited to this specific risk.24 18 In simplified terms, the following facilities are subject to the UmweltHG: facilities for heat generation, mining and energy (Nos 1–18), facilities for the production and processing of stone and earth, glass, ceramics and building materials (Nos 19–27), steel, iron and other metals, including processing (Nos 28–44), chemical products, pharmaceuticals, mineral oil refining (Nos 45–55), surface treatment with organic substances, production of plastic sheet materials, processing of resins and plastics (Nos 56–61), wood processing, pulping (Nos 62–63), animal feed production, agricultural products (Nos 64–67), processing or disposal of waste and scrap (Nos 68–77), storage, loading or 17

Rehbinder in: Landmann/Rohmer (eds.), § 3 UmweltHG mn. 18. Rehbinder in: Landmann/Rohmer (eds.), § 3 UmweltHG mn. 16. 19 Rehbinder in: Landmann/Rohmer (eds.), § 3 UmweltHG mn. 25. 20 Landsberg/Lülling, Umwelthaftungsrecht, 1991, § 3 UmweltHG mn. 21; Rehbinder in: Landmann/ Rohmer (eds.), § 3 mn. 27. 21 Landsberg/Lülling, § 3 UmweltHG mn. 21. 22 BT‐Drs. 11/7104, 16. 23 VG Köln BeckRS 2010, 49247. 24 Landsberg/Lülling, § 1 UmweltHG mn. 167 et seq. 17 18

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unloading of materials such as mineral oil, methanol, acrylonitrile, sulphur dioxide, pesticides, etc. (Nos 78–89), plants for the manufacture, treatment, processing, recovery or destruction of explosive substances as defined in the German Explosives Act, which are intended for use as explosives, detonators, propellants, pyrotechnic compositions or for the manufacture of such substances (No. 90), plants for the manufacture of celluloid (No. 91), plants for the manufacture of additives for lacquers and printing inks based on cellulose nitrate with a certain nitrogen content (No. 92), facilities for melting or distilling natural asphalt (No. 93), pitch boilers (No. 94), facilities for the production of building protection, cleaning, wood preservatives or adhesives with a capacity of one tonne or more per day (No. 95), facilities for the production of wood preservatives using halogenated aromatic hydrocarbons (No. 96). Annex 1, in its exhaustive form, does not permit extensions by means of analogy. 19 The exhaustive nature of Annex 1 is criticised by parts of the German doctrine.25 Nevertheless, the BT‐Drs. emphasise the tradition of German law, according to which a precise description of the facilities subject to strict liability provisions is essential.26 If Annex 1 refers to threshold values with regard to operation, primarily, the legally 20 permissible maximum volume of operation is relevant. This volume of operation is determined by means of authorisations and provisions of administrative law. Only if the legally permissible volume of operation is exceeded, the actual volume of operation is considered (No. 1 of the Preamble to Annex 1). It is not of legal relevance if a facility is running below the permissible volume. This creates legal certainty for the injured party, as he/she can ignore the actual volume of operation considering a claim based on the UmweltHG.27 If the quantity of a substance is decisive for the applicability of the UmweltHG, one shall assess whether the required quantity can be present in permitconform operation or in the event of malfunction (No. 2 of the Preamble to Annex 1). The threshold value of several facilities belonging to the same operator must be added if the facilities concerned are territorially and operationally connected (No. 3 of the Preamble to Annex 1).

V. Damages subject to the UmweltHG 1. Basic principles Section 1 UmweltHG lists the categories of damages that are subject to the UmweltHG: 21 death, damage to body or health and damage to goods and objects. Section 1 UmweltHG, in contrast to Section 823 (1) BGB, does not aim to protect freedom. Violation of freedom in connection to environmental impacts can occur in cases in which persons are deprived of their liberty – for their own protection – because, for example, harmful gas has escaped.28 Under German law, violation of freedom is understood as a situation in which a person is not able to leave a certain place. Consequently, violation of freedom does not address situations in which a person is not able to reach a certain area. Therefore, residence bans cannot be considered as violations of freedom.29

25 Deutsch, Umwelthaftung: Theorie und Grundsätze, JZ 1991, 1097; Rehbinder in: Landmann/Rohmer (eds.), § 3 UmweltHG mn. 14; Nitsch in: BeckOGK, § 1 UmweltHG mn. 42 et seq. 26 BT‐Drs. 11/7104, 16. 27 Spickhoff/Riedhammer in: Soergel (ed.), § 3 UmweltHG mn. 11. 28 Kohler in: Staudinger (ed.), § 1 UmweltHG mn. 6; Landsberg/Lülling, § 1 UmweltHG mn. 17. 29 Wagner in: MüKo BGB § 823 mn. 210 et seq.

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Pure financial loss30 – e.g. a ski lift provider who is not able to offer its customers slopes with snow but only green meadows31 – and purely ecological loss are not covered by liability according to the UmweltHG. Since damage to the environment itself does not fall within the scope, the climate itself is not protected directly.32

2. Climate change damages subject to the UmweltHG? Despite the fact that damages to climate itself are not subject to the UmweltHG, the requirement of damage does not cause any difficulties for plaintiffs. So far, claims have been based on violation of property rights.33 For example, the Peruvian farmer in Lliuya v. RWE AG had to protect his property from being flooded by a dammed glacial lake. In the United States of America, an Inuit community claimed that their village had become uninhabitable due to erosion of the permafrost soil.34 Victims of Hurricane Katrina argued that climate change aggravated the hurricane which destroyed their property.35 The states of Massachusetts and California claimed that their coastal property was threatened by rising sea levels.36 The State of Connecticut claimed that its infrastructure was at risk.37 24 Climate change also affects determinants of health, such as clean air and drinking water. According to the World Health Organization, between 2030 and 2050, climate change is expected to cause approximately 250,000 additional deaths per year, caused by malnutrition, malaria, diarrhoea and heat stress. In respect of the consequences for human health, the costs are estimated to be between USD 2‐4 billion per year by 2030.38 25 The categories of damages that are subject to the UmweltHG are listed in Section 1 UmweltHG: death, damage to body or health and damage to goods and objects. With regard to death and damage to body or health the terminology and general doctrine of Section 823 BGB can be applied (cf Part 4, S.). Personal injury is comprehended as an encroachment on physical integrity, whereas damage to health means a distortion of the physical, but also the mental or psychological state of a person. Since both categories of damage are subject to the same rules, the law does not provide for a distinction.39 26 In contrast to Section 823 BGB, Section 1 UmweltHG does not state a violation of property rights but requires damage to goods and objects. In this context the definition of objects according to Section 90 BGB is used, which requires physicality. Both movable and immovable objects are covered by the scope of protection. Buildings, biotopes, flora and fauna, with the exception of wild and abandoned animals, are also subject to the protection of the UmweltHG.40 Damage to goods and objects includes the impairment of the material substance, the material condition and the material destruction, but also the change of the material condition, the impairment of the intended use and the ecological functionality of an object.41 23

30 BT‐Drs. 11/7104, 17; Brüggemann, Zivilrechtliche Umwelthaftung in Frankreich und Deutschland, 2009, 134. 31 Burtscher/Spitzer, JETL 2017, 137 (157); Burtscher/Spitzer, ÖJZ 2017/134. 32 Chatzinerantzis/Herz, NJOZ 2010, 594. 33 Burtscher/Spitzer, JETL 2017, 137 (156); Burtscher/Spitzer, ÖJZ 2017/134. 34 Kivalina v. ExxonMobil. 35 Comer v. Murphy Oil. 36 Massachusetts v. EPA; California v. General Motors. 37 Connecticut v. American Electric Power. 38 https://www.who.int/news-room/fact-sheets/detail/climate-change-and-health. 39 Landsberg/Lülling, § 1 UmweltHG mn. 26 et seq. 40 Landsberg/Lülling, § 1 UmweltHG mn. 33 et seq. 41 Rehbinder in: Landmann/Rohmer (eds.), § 1 UmweltHG mn. 41 et seq.

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Since the application of the UmweltHG does not depend on the violation of property 27 rights but on the damage to goods and objects it broadens the scope of potential claimants. Although protection against damage to goods and objects primarily safeguards the proprietor42, claims by a person with limited rights in rem or an entitled possessor are permissible.43 Thus, a violation of servitudes, realty charges, usufructuary rights, liens, rights conferring prospective entitlement or rights of appropriation (e.g. hunting, fishing rights, and mining) might give rise to liability under the UmweltHG.44 However, claims due to damage in substance are being denied to those with limited rights in rem or to a possessor.45 Despite, those might claim compensation for the damage caused by the violation of their rights.46

VI. Environmental impact 1. Basic principles The damaging event must occur on the environmental pathway. This means that it 28 must be caused by an environmental impact. According to Section 3 (1) UmweltHG, if damage is caused by substances, vibrations, noises, pressure, radiation, gases, vapours, heat or other phenomena which have spread to the soil, air or water, it is caused by environmental impact. Thus, a distribution to and circulation in environmental media is required. This 29 requirement is met if the physical, chemical or biological composition of the environmental medium has changed. Whether such a change is a prerequisite for the qualification as an environmental impact is controversial47, but should be irrelevant.48 In any case, it is irrelevant whether the medium changes adversely.49 The wording of Section 3 (1) UmweltHG speaks in favour of this theory. If an adverse environmental change was to be required, Section 3 (1) UmweltHG would presumably speak of ‘environmental damage’.50 Solely mechanical dangers do not qualify as environmental impact.51 This judgment 30 can be argued based on the motivation of the UmweltHG. If mere mechanical dangers were covered by the term of environmental impact, liability under UmweltHG would be of general kind and not, as intended, bound to environmental media.52 The mere motion by gravity is not to be comprehended as distribution and circulation in the sense of Section 3 (1) UmweltHG. From this perspective, damages resulting from the mere motion of objects by gravity do not qualify as damages caused by environmental Landsberg/Lülling, § 1 UmweltHG mn. 48. Kohler in: Staudinger (ed.), 2017, § 1UmweltHG mn. 26. 44 Salje in: Salje/Peter (eds.), Kommentar zum Umwelthaftungsgesetz, 2nd ed., 2005, §§ 1, 3 UmweltHG mn. 93. 45 Landsberg/Lülling, § 1 UmweltHG mn. 53. 46 Nitsch in: BeckOGK, § 1UmweltHG mn. 25. 47 Rehbinder in: Landmann/Rohmer (eds.), § 3 UmweltHG mn. 8; Landsberg/Lülling, § 3 UmweltHG mn. 2; Rehbinder in: Landmann/Rohmer (eds.), § 3 UmweltHG mn. 8. 48 Nitsch in: BeckOGK, § 3 UmweltHG mn. 6. 49 Landsberg/Lülling, § 3 UmweltHG mn. 4; Nitsch in: BeckOGK, § 3 UmweltHG mn 6. 50 Landsberg/Lülling, § 1 UmweltHG mn. 14; Reese, DStR 1996, 24 (27); Salje in: Salje/Peter (eds.), §§ 1, 3 UmweltHG mn. 74; Nitsch in: BeckOGK, § 3 UmweltHG mn 6. 51 Rehbinder in: Landmann/Rohmer (eds.), § 3 UmweltHG mn. 9; Nitsch in: BeckOGK, § 3 UmweltHG mn. 10. 52 Rehbinder in: Landmann/Rohmer (eds.), § 3 UmweltHG mn. 3, 9; Nitsch in: BeckOGK, § 3 UmweltHG mn. 10. 42 43

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impact.53 Liability in such cases would lead to an excess of liability. Still, mechanical dangers caused by environmental impact fall under the scope of liability. 31 The criterion of distribution in soil, air or water is fulfilled if substances enter one of the environmental media and are spread in it, whereby they are transported on through the medium. Considering this, the mere existence of a substance does not fulfil an environmental impact. Consequently, in cases of damage caused by direct contact – e.g., falling into a container filled with hazardous substances54 – liability according to the UmweltHG is excluded for lack of environmental impact.55

2. Environmental impact in the form of climate change Applying the above principles to climate change damages, the observations are as follows: a facility emits greenhouse gases, such as carbon dioxide (CO2), through its operation. CO2 is distributed in the atmosphere and causes the climate to change (global warming).56 An environmental impact in the meaning of the UmweltHG can already be seen in this change of global temperature. 33 Subsequently, global warming causes impacts such as melting arctic sea ice and glaciers57, increasing temperatures of the upper layers of the ocean,58 changes in ocean chemistry (such as ocean acidification59)60, rising sea levels61, increase in flood frequency62, hurricanes63, heavy precipitations and monsoons64, tropical cyclones and extratropical storms65, drought and dryness66 and changes in terrestrial and wetland ecosystems (such as biome shifts, changes in phenology, changes in species range, abundance and extinction, changes in ecosystem functions, biomass and carbon stock).67 In addition, climate change affects determinants of health, such as food and nutrition security (such as impacts on crop68 and aquaculture production69) clean air and freshwater resources.70 32

Landsberg/Lülling, § 3 UmweltHG mn. 6; Nitsch in: BeckOGK, § 3 UmweltHG mn. 10. BT‐Drs. 11/7104, 17. 55 Rehbinder in: Landmann/Rohmer (eds.), § 3 UmweltHG mn. 11. 56 Hoegh‐Guldberg/Jacob/Taylor/Bindi/Brown/Camilloni/Diedhiou/Djalante/Ebi/Engelbrecht/Guiot/ Hijioka/Mehrotra/Payne/Seneviratne/Thomas/Warren/Zhou, Impacts of 1.5ºC Global Warming on Natural and Human Systems in Masson‐Delmotte/Zhai/Pörtner/Roberts/Skea/Shukla/Pirani/Moufouma‐ Okia/Péan/Pidcock/Connors/Matthews/Chen/Zhou/Gomis/Lonnoy/Maycock/Tignor/Waterfield (eds.), Global Warming of 1.5°C. An IPCC Special Report on the impacts of global warming of 1.5°C above preindustrial levels and related global greenhouse gas emission pathways, in the context of strengthening the global response to the threat of climate change, sustainable development, and efforts to eradicate poverty, 2018, 177–284. 57 Ibid., 205. 58 Ibid., 204. 59 Ibid., 223. 60 Ibid., 209. 61 Ibid., 206, 231. 62 Ibid., 201. 63 Ibid., 203. 64 Ibid., 191. 65 Ibid., 203. 66 Ibid., 196. 67 Ibid., 216. 68 Ibid., 236. 69 Ibid., 237. 70 Ibid., 213, 240 et seq.; https://www.who.int/news-room/fact-sheets/detail/climate-change-and-health. 53 54

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VII. Causation 1. Basic principles Since liability under Section 1 UmweltHG as strict liability is independent of unlawful conduct and fault, the focus shifts to causation.71 A causal link must be established between the operation of the facility and an environmental impact (causation of impact72), additionally, between such an environmental impact and an impairment (causation of impairment73).74 For the purposes of this handbook this present chapter is limited to basic findings on causation and, for a more in-depth discussion, refers to Part 6. According to principles of German tort law, causation must be assessed by means of the conditio sine qua non-formula.75 The conditio sine qua non-formula examines whether the damage would have occurred if the conduct was not set. Thus, certain conduct is considered to be causal for the damage if the conduct cannot be thought away without the damage disappearing simultaneously.76 Using the conditio sine qua non-formula, one asks ‘but for the existence of certain conduct, would the damage have occurred?’. Applying this concept on climate change damages one must assess ‘but for the emissions of facility X, would the damage have occurred?’ The conditio sine qua non-formula is often criticised because it takes in an almost boundless field of events. Each damage is based on countless conditions.77 This applies even more to climate change damages. Nevertheless, the conditio sine qua non-formula serves as the first filter of liability. Further criteria such as adequacy, interruption of the causal link, the protective purpose of the rule etc. serve as mechanisms of limitation aiming to prevent excessive liability.78 Under German law in general, differentiation must be made between this factual and legal causation. Legal causation examines if there is a causal connection between the impairment of a right and a certain damage.79 In the field of environmental liability in general80, in the case of climate change litigation in particular81, a large number of factors cause the environmental impact, which subsequently causes damage. Sections 6 and 7 UmweltHG indicate that cases of multiple causation are covered by the UmweltHG.82 In cases of damage caused by conscious and deliberate collaboration, Section 830 (1) sent. 1 BGB and Section 830 (2) BGB apply, with the result that the tortfeasors are jointly and severally liable. Without doubt, in the field of liability for climate change damages, cases of conscious and deliberate collaboration are rare.

Landsberg/Lülling, § 1 UmweltHG mn. 155. Salje in: Salje/Peter (eds.), §§ 1, 3 UmweltHG mn. 114 et seq. 73 Salje in: Salje/Peter (eds.), §§ 1, 3 UmweltHG mn. 118 et seq. 74 Rehbinder in: Landmann/Rohmer (eds.), § 1 UmweltHG mn. 6; Landsberg/Lülling, § 1 UmweltHG mn. 156a; Deutsch, JZ 1991, 1097 (1099). 75 Wagner in MüKo, BGB § 823 mn. 69. 76 Koziol, Basic Questions of Tort Law from a Germanic Perspective, 2012, mn. 5/59. 77 Ibid., mn. 5/59. 78 Ibid., mn. 7/1 et seq. 79 Landsberg/Lülling, § 1 UmweltHG mn. 156 a. 80 Paschke, Kommentar zum Umwelthaftungsgesetz, 1993, § 1 UmweltHG mn. 54. 81 Cf. IPCC Report on Detection of Climate Change and Attribution of Causes: https://www.ipcc.ch/ site/assets/uploads/2018/03/TAR-12.pdf. 82 Paschke, § 1 UmweltHG mn. 54; Landsberg/Lülling, § 1 UmweltHG mn. 177 et seq; Nitsch in: BeckOGK, § 1 UmweltHG mn. 62. 71 72

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In cases of competing causation each contribution alone would have caused the damage. In such cases the conditio sine qua non-Formula fails to serve as a method of assessing causation since even if the conduct of one tortfeasor is being thought away the damage would still have occurred. Nevertheless, in such cases each contribution is regarded as causal.83 With regard to climate change damages, one can rarely speak of competing causation since the emissions of one single facility would not be apt to cause global warming. 39 In cases of cumulative or complementary causation, damage is caused solely by the coexistence of the causal contributions. None of the contributions alone would have causal effects, but together they damage. Due to the conditio sine qua non-formula, all contributions are causal and thus entail an obligation to pay compensation.84 Without doubt, even minimal contributions can give rise for liability. Nevertheless, a precondition is, certainly, that a causal link can be proven.85 40 Often, environmental impacts are caused alternatively or combined by conduct relevant to tort law, such as the operation of a facility, and contributions which are insignificant under tort law, such as coincidental events like meteorological conditions. In such cases, part of the doctrine holds that joint and several liability can be derived from Section 830 (1) sent. 2 BGB. The consequence of this view is that the potential tortfeasor is liable to the injured party, whereby a proportion of the damage potentially caused by coincidence is deducted. If this proportion cannot be determined, liability per capita is applied.86 Another part of the doctrine refuses to apply Section 830 (1) sent. 2 BGB. This refusal is substantiated by the fact that liability for merely potential causation cannot be substantiated by means of leg cit. This provision can only be applied if it is established that each individual contribution to the causation would have caused the damage in its entirety.87 41 If more than one contribution is proven to be causal, the question arises as to whether the tortfeasors in relation to the damaged party are liable in proportion (pro rata) or if a joint and several liability is justified. The UmweltHG does not contain a specific provision on this question. Section 8 of the legislative draft provided for this question but was deleted in the course of the legislative procedure. Section 8 of the legislative draft provided that in the case of causation by several facilities if the damage was caused by authorisation compliant operation operators would only be liable pro rata according to their contribution. In such cases joint and several liability was considered unjustified. According to the BT‐Drs. an analogous application of Section 830 (1) sent. 2 BGB to environmental liability was considered to have unforeseeable consequences.88 The Judiciary Committee and the Federal Government argued that joint and several liability could only be justified in the case of damage caused by operation exceeding the facility’s permit. This opinion rests on the assumption that if joint and several liability applies in all cases, the injured party would be led to file a claim not against the operator most likely to have caused the damage, but against the operator whose financial status makes compensation payments appear probable.89 The Federal Council refused Section 8 of the legislative draft. It stated that in the interest of the injured party it would be necessary to create a provision modelled after 38

Spickhoff/Riedhammer in: Soergel (ed.), § 1 UmweltHG mn. 8. BGH BeckRS 2002, 49; Spickhoff/Riedhammer in: Soergel (ed.), § 1 UmweltHG mn. 8. 85 Kohler in: Staudinger (ed.), Einl. zum UmweltHR mn. 173; Paschke, § 1 UmweltHG mn. 58; Frank, NJOZ 2010, 2296. 86 Larenz/Canaris, Schuldrecht Besonderer Teil, vol. II, § 82 II 3, 578 et seq; Bydlinski, Probleme der Schadensverursachung, 1964, 78 et seq. 87 Wagner in: MüKo BGB § 830 mn. 66, 77 et seq. 88 BT‐Drs. 11/7104, 19. 89 BT‐Drs. 11/7881, 29. 83 84

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Section 13 Liability Act90, Section 17 Road Traffic Act91, Section 41 Air Traffic Act92 according to which all potentially liable parties would be jointly and severally liable in relation to the damaged party. Furthermore, regress by proportion of causation was expected to be much easier between the tortfeasors, so that joint and several liability in relation to the damaged party should not only apply in the event of damage caused by an operation exceeding its permit, but must apply in all cases.93 In the Federal Government’s reply to the Federal Council’s statement reference was made to the importance of the objection of authorisation compliant operation. Compliant operation was considered to be economically desirable and to represent a socially adequate measure with regard to the industrial society. The Federal Government’s reply stressed the strict provisions of administrative law, to which facilities are subject. In conclusion, the Federal Government considered the defence of authorisation compliant operation to be strengthening the UmweltHG’s preventive effect. By the fact that joint and several liability of a tortfeasor, who operates a facility in compliance with regulations and authorisations, is denied, a further incentive is created to operate in compliance with the authorisation and to run the facility as low in pollutants as possible. Again, reference was made to the risk of actions being brought against the solvent tortfeasor without regard to the probability of causation.94 Despite all these considerations, Section 8 of the legislative draft was deleted, with the result that the UmweltHG is missing a provision governing the question of whether joint and several liability or proportional liability applies in the event of causation by several operators. One could argue in favour of joint and several liability towards the injured party 42 based on the general dogmatic of German tort law, which applies joint and several liability according to Sections 830, 840 BGB, and on the basis of joint and several liability in other cases of strict liability (Section 5 (1) sent. 1 Product Liability Act95, Section 22 (1) sent. 2 or Section 89 (1) Water Resources Act96, Section 33 (1) Atomic Energy Act97). Of central importance is that also in such cases, it must be proven that specific conduct was causal for the respective damage.98 Salje stresses that liability is the indispensable counterpart to tolerating dangerous conduct which would otherwise have to be prohibited. According to the author, liability forms this counterpart regardless of whether the operation is within the permit or exceeding it. Based on this approach, one could reason that difficulties in evidence must not burden the injured party, so that the distinction proposed by the Federal Government between authorisation compliant and exceeding operation must be rejected.99 Nevertheless, also according to Salje, joint and several liability must be denied in the case of minimal contributions.100 In light of climate change damages, this view is of essential importance. This category of damages is caused by minimal contributions, since climate change has to be perceived globally 90

Haftpflichtgesetz (HPflG) 04.01.1978, BGBl. 1978 I 145. Straßenverkehrsgesetz (StVG) 05.03.2003, BGBl. 2003 I 310, 919. 92 Luftverkehrsgesetz (LuftVG) 10.05.2007, BGBl. 2007 I 698. 93 BT‐Drs. 11/7104, 25. 94 BT‐Drs. 11/7104, 31. 95 Gesetz über die Haftung für fehlerhafte Produkte (Produkthaftungsgesetz, PHG) 15.12.1989, BGBl. 1989 I 2198. 96 Gesetz zur Ordnung des Wasserhaushalts (Wasserhaushaltsgesetz, WHG) 31.07.2009, BGBl. 2009 I 2585. 97 Gesetz über die friedliche Verwendung der Kernenergie und den Schutz gegen ihre Gefahren (Atomgesetz, AtG) 15. 7 1985, BGBl. 1985 I 1565. 98 Keller/Kapoor, BB 2019, 706 (710). 99 Salje in: Salje/Peter (eds.), §§ 1, 3 UmweltHG mn. 126. 100 Salje in: Salje/Peter (eds.), §§ 1, 3 UmweltHG mn. 130; Spickhoff/Riedhammer in: Soergel (ed.), § 1 UmweltHG mn. 9. 91

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and, as a result, the contributions even of large-scale industrial enterprises are minimal contributions due to this global perception.

2. Presumption of causation According to Section 6 UmweltHG, causation is concluded from the facility’s aptness of damaging. If, considering the circumstances of the individual case, a facility is apt to cause the damage incurred, it is presumed that the damage was caused by this particular facility. This presumption of causation intensifies the liability and its function. 44 The assessment of aptness of causing damage has to be based on the course of operations, the equipment used, the type and concentration of the substances used, the meteorological conditions, the time and place of the occurrence of the damage and the damage pattern as well as on all other circumstances which speak in favour of or against causation (Section 6 (1) UmweltHG). 45 According to Section 6 (2) UmweltHG, the presumption does not apply if the facility has been operated as stipulated in its permit. The burden of proof that the facility has been operated in accordance with its permit lies with the operator of the facility.101 Nevertheless, if the presumption pursuant to Section 6 (2) UmweltHG is denied, the plea of a damaged party shall not be subject to unreasonable requirements if, due to a lack of special expertise and without knowledge of individual operational processes, the party can only present presumptions.102 46 Another preclusion of the presumption of causation is governed by Section 7 UmweltHG. If several facilities subject to the UmweltHG are considered to be apt to damage, the presumption of causation is excluded according to Section 7 (1) UmweltHG if another circumstance is apt to cause the damage according to the circumstances of the individual case. However, it must be clarified in this context that if several facilities are apt to cause damage, the operators of these facilities cannot relieve each other of the presumption of causation by referring to the suitability of that other facility. If several facilities are apt to cause damage, the application of the presumption of causation is only excluded if, in addition to these facilities, another circumstance can be considered the cause of the damage.103 If only one facility is apt to damage, the presumption of causation is denied pursuant to Section 7 (2) UmweltHG if another circumstance is apt to cause the damage. Such alternative cause requires sufficiently concrete findings, which prove aptness either alone or in combination with other causal contributions not attributable to the tortfeasor.104 43

3. Causation in cases of climate change damages 47

A range of obstacles to liability for climate change damages came to the forefront of legal discussion. Causation is certainly one of the main barriers. Proving causation is considered to be the most significant challenge due to the multi-scale nature of climate change, with its large number of concurrent tortfeasors.105 The multitude of sources of greenhouse gas emissions across time and space makes establishing causation an almost impossible task.106 101

BGH NJW 1997, 2748. BGH NJW 1997, 2748. 103 BT‐Drs. 11/7104, 18. 104 BGH NJW 1997, 2748. 105 Ferreira, Transnational Environmental Law 2016, 329 (338). 106 Ibid., Transnational Environmental Law 2016, 329 (339); Saurer, ZUR 2018, 679 (680); Spitzer in: Huber/Neumayr/Reisinger (eds.), Festschrift Danzl, Der Klimawandel als juristische Kategorie – Internationale Perspektiven, 2017, 655 (667); Karner, Klimasünder schadenersatzrechtlich zur Verantwortung ziehen? APA Science Dossier dated 28.3.2019: https://science.apa.at/dossier/Klimasuender_schadener102

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Anthropogenic greenhouse gas emissions are primarily driven by the size of population, economic activity, human’s daily routine, use of energy, land use patterns, technology and climate policy. Despite the fact that solar variability and an increase in volcanic activity are considered to additionally have effects on the global temperature, according to the Intergovernmental Panel on Climate Change (IPCC), there is a more than 95 % possibility that human activities over the past 50 years have caused global warming.107 With regard to the problem of the uncertainty as to whether significant or incidental contributions were causal, in the case of climate change damages the following must be taken into account: Section 830 (1) sent. 2 BGB can only be applied if it is established that each individual contribution would have caused the damage in its entirety.108 Precisely this cannot be claimed for climate change damage. As convincing as it is that the risk of untraceable contributions of causation should not affect the injured party alone, it is mistaken to shift this risk to each tortfeasor.109 Since climate change damages are caused by contributions via additive effects, it must be examined whether the rules on cumulative causation solve the underlying problem. It must be underlined that even in cases of cumulative causation, the course of the particular emission in question must be proven in order to demonstrate that this particular emission was cumulatively causal.110 It certainly is debatable whether a facilitation of the burden of proof can be applied at all in cases of such diffuse causation. Frank takes the view that causation can be argued pursuant to Section 287 German Code of Civil Procedure (Zivilprozessordnung – hereinafter referred to as ‘ZPO’).111 Section 287 ZPO entitles the judge to estimate the proportion of legal causation. Within the scope of application of Section 287 ZPO it is sufficient if the damaged party submits facts which contain indications so that the judge can make his/her estimation.112 However, the general rule to be observed is that Section 287 ZPO is only applicable to legal causation.113 Factual causation is subject to Section 286 ZPO, according to which such a degree of certainty is required, which would silence doubts without completely excluding them.114 An application of Section 287 ZPO to factual causation can only be achieved on the basis of the German Supreme Court’s argumentation in VI ZR 223/82115 – the so called Cupola-Case:116 the German Supreme Court stated that even if, in principle, the injured party has to claim and prove that emissions caused the alleged violation, it is conceivable to facilitate the burden of proof if it is established that the emission or immission values stipulated by administrative regulations were exceeded. According to the German Supreme Court, in individual cases, a reversed burden of proof may even be considered. In addition, the German Supreme Court highlights, that the standards of Section 287 ZPO can be applied in such cases. However, the significance of the decision is limited to cases in which the facility is being operated exceeding its permit.117 In all satzrechtlich_zur_Verantwortung_ziehen/SCI_20190328_SCI82455587247619106; Burtscher/Spitzer, JETL 2017, 137 (166). 107 https://www.ipcc.ch/site/assets/uploads/2018/02/AR5_SYR_FINAL_SPM.pdf. 108 Wagner in: MüKo BGB § 830 mn. 66, 77 et seq. 109 Ibid., § 830 mn. 80. 110 Keller/Kapoor, BB 2019, 706 (710). 111 Frank, ZUR 2019, 518; Frank, NVwZ 2018, 960; Frank, ZUR 2013, 28; Frank, NJOZ 2010, 2296 (2297 et seq.). 112 Bacher in: BeckOK ZPO, § 287 ZPO mn. 14; Burtscher/Spitzer, JETL 2017, 137 (166). 113 BGH NJW 2016, 3532; NJW-RR 2014, 545; NJW 2008, 1381. 114 BGH BeckRs 2019, 19211. 115 BGH VI ZR 223/82 BGHZ 92, 143 = NJW 1985, 47 = VersR 1984, 1072. 116 Wagner in: MüKo BGB § 823 mn. 889. 117 Wagner in: MüKo BGB § 823 mn. 891.

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other cases, proving factual causation remains difficult. CO2 emissions also result from operation in accordance with the permit. In these cases, a reversal of the burden of proof is therefore precluded. In such cases also the presumption of causation stipulated in Section 6 UmweltHG seizes to apply. 52 Contrary to Frank, according to Ahrens,118 Burtscher/Spitzer119, Chatzinerantzis/ Appel120, Chatzinerantzis/Herz121, Karner122, Keller/Kapoor123 and Wagner124, plaintiffs are unlikely being able to proof factual causation to the required extent. Particularly Ahrens stresses that diffuse damages – such as climate change damages – cannot be addressed by means of tort law.125 He substantiates this view with recourse to the BT‐Drs. These emphasize that damages resulting from general environmental pollution cannot be claimed on any basis of tort law.126 The author also takes this view from European environmental liability law (Directive 2004/35/CE127).128 According to recital 13 of Directive 2004/35/CE, liability is no suitable instrument for dealing with broadly dispersed, not clearly identified environmental pollution. The attribution of environmental impacts to particular individual actors is therefore essential for Ahrens.129 53 This view is in line with settled German court practice. In the so-called forest dieback case of 1987, the German Supreme Court had to decide whether under German law liability for damage to forests could be argued. According to the court’s position, forest dieback is primarily a result of air pollution caused by commercial and industrial plants, private combustion plants and road, rail and air transport vehicles. The German Supreme Court dismissed the claim. It stated that causation could not be proven because the emission contributions of the emitters were indistinguishably mixed.130 Certainly, one must transfer these findings to greenhouse gas emissions. Ahrens accentuates that – compared to damage to German forests – it is even more difficult to attribute the damage caused by climate change worldwide to individual emitters.131 Keller/Kapoor underline that it is not possible to determine where a particular emission escapes to and what other atmospheric substances it mixes with. Additionally, the authors stress, that it is also unclear whether an emission remains in the atmosphere and whether and to what extent it causes a specific environmental damage.132 The authors furthermore point out that other anthropogenic factors and natural factors (such as solar radiation and natural greenhouse gas emissions) are added to individual emissions. This is considered to aggravate climate change. The authors therefore conclude that it can hardly be asserted that an individual emission is the cause of

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Ahrens, VersR 2019, 645 (652 et seq.). Burtscher/Spitzer, JETL 2017, 137 (167). 120 Chatzinerantzis/Appel, NJW 2019, 881. 121 Chatzinerantzis/Herz, NJOZ 2010, 594. 122 Karner, APA Science Dossier. 123 Keller/Kapoor, BB 2019, 706 et seq. 124 Wagner in MüKo BGB § 823 mn. 891. 125 Ahrens, VersR 2019, 645 (653). 126 BT‐Drs. 11/7104, 14. 127 Directive 2004/35/CE of the European Parliament and of the Council of 21 April 2004 on environmental liability with regard to the prevention and remedying of environmental damage, OJ 2004 L 143/56. 128 Ahrens, VersR 2019, 645 (653). 129 Ahrens, VersR 2019, 645 (653). 130 BGH NJW 1988, 478; Keller/Kapoor, BB 2019, 706 (708). 131 Ahrens, VersR 2019, 645 (654). 132 Keller/Kapoor, BB 2019, 706 (708). 119

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certain climate change damages. Thus, Keller/Kapoor deny proof of causation (even within Section 286 ZPO133).134 In Lliuya v. RWE AG, the District Court of Essen argued that there was a lack of 54 causation to hold RWE AG liable for the melting of the glaciers in Peru. The court concluded that the damage was not caused by certain CO2 molecules of RWE AG but was the consequence of a global phenomenon. In 2017, the Higher Regional Court of Hamm decided to take evidence if, as a result of the considerable increase in the spread and water volume of the Palcacocha Lagoon, there was a serious threat of flooding and/or mudslides affecting the plaintiff’s property below the glacier lagoon. The court requested evidence if CO2 emissions of RWE AG’s power plants were released into the atmosphere and lead to a higher density of greenhouse gases in the entire earth’s atmosphere due to physical laws. Furthermore, if the compression of greenhouse gas molecules resulted in a reduction of global heat radiation and an increase in global temperature; if as a result of the increase in local average temperatures, the melting of the Palcaraju glacier was accelerating and if the glacier was losing its extent and retreating, the water volume of the Palcacocha lagoon was rising to a level that no longer could be maintained by the natural moraine. Of central importance is the view of the Higher Regional Court of Hamm that RWE AG’s share of causation could be measured and calculated by experts.135 With this argumentation elaborated by the Higher Regional Court of Hamm climate change litigation certainly receives another chapter. However, in the context of liability under the UmweltHG it must be borne in mind 55 that the German legislator clarified that cases of such diffuse causation shall not be subject to the UmweltHG.136 This is a perspective that courts should respect.

VIII. Temporal scope of application Even if one argues that liability under the UmweltHG should be permissible, the 56 temporal scope remains as an obstacle. According to Section 23, the UmweltHG does not apply if ‘damage’ was caused before 1.1.1991. The wording of Section 23 UmweltHG is rather misleading and raises questions, especially in context of environmental impacts of permanent nature.137 For the majority of German scholars the time of environmental impact is decisive.138 If damage occurs gradually as a result of long-time impacts, liability under the UmweltHG only applies to the part that was added after it came into force.139 However, this can only apply to damages that can be allocated in terms of time and are subsequently divisible. If, however, environmental impacts of a permanent nature that occurred before 1.1.1991, in addition or intensified with environmental impacts after this date, cause damage, liability according to the UmweltHG can apply.140 133

Ibid., 710. Ibid., 709. OLG Hamm I-5 U 15/17 ZUR 2018, 118. 136 BT‐Drs. 11/7104, 14. 137 Nitsch in: BeckOGK, § 23 UmweltHG mn. 1. 138 Schmidt-Salzer, Kommentar zum Umwelthaftungsrecht, 1992, § 23 UmweltHG mn. 10 et seq.; Landsberg/Lülling, § 23 UmweltHG mn. 2; Paschke, § 23 UmweltHG mn. 3 et seq.; Hager in: Landmann/Rohmer (eds.), § 23 UmweltHG mn. 2 et seq.; Kohler in: Staudinger (ed.), § 23 UmweltHG mn. 4 et seq.; Nitsch in: BeckOGK, § 23 UmweltHG mn. 3. 139 BT‐Drs. 11/7104, 22. 140 Landsberg/Lülling, § 23 UmweltHG mn. 3; Spickhoff/Riedhammer in: Soergel (ed.), § 23 UmweltHG mn. 2; Kohler in: Staudinger (ed.), § 23 UmweltHG mn. 6; Nitsch in: BeckOGK, § 23 UmweltHG mn. 5. 134 135

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Considering that in the case of climate change damages it is unclear which emission was emitted when and whether it still exists in the atmosphere, this question cannot be answered with certainty.

IX. Conclusion Proceedings in the field of climate change lead to the limits of traditional litigation and in many areas require a fundamental reconsideration of established tort law concepts.141 The presence of multiple tortfeasors, with relatively insignificant emissions when taken individually, represents a challenge to traditional liability theories of causation.142 58 With regard to the UmweltHG, the German legislator explicitly stated that although damage caused by general environmental pollution was a very significant element in the overall context of environmental damage, the provisions necessary to compensate for it needed further in-depth consideration. Especially with regard to the instruments with which compensation is to be implemented and who is to contribute to the costs and to what extent; for their compensation, distinct approaches are essential.143 Since the German legislator does not subject diffuse environmental damage – such as climate change damages – to the UmweltHG, courts should respect the lex lata limit. In pursuit of aiming to use ‘climate justice’ as an instrument for compensating political inactivity, the principle of separation of powers must be observed.144 Solutions negotiated through the democratic process are therefore indispensable, however difficult they may be to achieve.145 57

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Beck 2012; Habersack/Ehrl, Verantwortlichkeit inländischer Unternehmen für Menschenrechtsverletzungen durch ausländische Zulieferer – de lege lata und de lege ferenda, AcP 219 (2019), 155; Hansmann/ Kraakman, The End of History for Corporate Law, 89 Georgetown Law Journal 439 (2001); Harbarth, Anforderung an die Compliance – Organisation in börsennotierten Unternehmen, ZHR 179 (2015), 136; Hauschka, Compliance am Beispiel der Korruptionsbekämpfung, ZIP 2004, 877; Hauschka/Moosmayer/ Lösler (ed.), Corporate Compliance, 3rd ed., C.H. Beck 2016; Hennrichs, Die Grundkonzeption der CSRBerichterstattung und ausgewählte Problemfelder, ZGR 2018, 206; Hirte/Mülbert/Roth (ed.), AktG Großkommentar, vol. 4/1 and 4/2, 5th ed., commentary, De Gruyter 2015; Hobe (ed.), Einführung in das Völkerrecht, 10th ed., Francke 2014; Hommelhoff, Nichtfinanzielle Ziele in Unternehmen von öffentlichem Interesse – Die Revolution übers Bilanzrecht –, in: Bork (ed.), Festschrift für Bruno M. Kübler zum 70. 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I S. 1185) mit Begründung des Regierungsentwurfs, Bericht des Rechtsausschusses des Deutschen Bundestags, Verweisungen und Sachverzeichnis, Verl.-Buchhandlung des Instituts d. Wirtschaftsprüfer 1965; Kropff, Rückblick, in: Fleischer/Koch/Kropff/Lutter (ed.), 50 Jahre Aktiengesetz, ZGR 19. Sonderheft 2016, 1; Kuhner, Unternehmensinteresse vs. Shareholder Value als Leitmaxime kapitalmarktorientierter Aktiengesellschaften, ZGR 2004, 244; Lehmann/Eichel, Globaler Klimawandel und Internationales Privatrecht, RabelsZ 83 (2019), 77; Lutter, Die Business Judgment Rule und ihre praktische Anwendung, ZIP 2007, 841; Mansel, Internationales Privatrecht de lege lata und de lege ferenda und Menschenrechtsverantwortlichkeit deutscher Unternehmen, ZGR 2018, 439; Mataja, Das Recht des Schadenersatzes vom Standpunkt der Nationalökonomie, Duncker & Humblot 1888; Maunz/Dürig et al. (ed.), Grundgesetz Kommentar, vol. III, 89. addtl. supp. October 2019, commentary, C.H. 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Geburtstag: Gesellschaftsrecht, Rechnungslegung, Sportrecht, Verlag Dr. Otto Schmidt 2005, p. 421; Mülbert, Soziale Verantwortung von Unternehmen im Gesellschaftsrecht, AG 2009, 766; Negenborn, Bankgesellschaftsrecht und Sonderkonzernrecht, Mohr Siebeck 2019; Ott, Anwendungsbereich der Business Judgment Rule aus Sicht der Praxis – Unternehmerische Entscheidungen und Organisationsermessen des Vorstands, ZGR 2017, 149; Ott/Schäfer (ed.), Allokationseffizienz in der Rechtsordnung: Beiträge zum Travemünder Symposium zur ökonomischen Analyse des Zivilrechts, Springer 1989; Payandeh, Deliktische Haftung von Unternehmen für transnationale Menschenrechtsverletzungen, in: Boele-Woelki et al. (ed.), Festschrift für Karsten Schmidt zum 80. Geburtstag, vol. II, C.H. Beck 2019, p. 131; Prieß, Die völkerrechtlichen Grenzen der Nutzung natürlicher Ressourcen in Gebieten ohne ohne Selbstregulierung: Zum wirtschaftlichen Gehalt des Selbstbestimmungsrechts der Völker, in: Delbrück et al. 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V. Climate protection and compliance in German corporate law Vahlen 2015; Rittner, Zur Verantwortung des Vorstandes nach § 76 Abs. 1 AktG 1965, in: Ballerstedt/ Hefermehl (ed.), Festschrift für Ernst Gessler: zum 65. Geburtstag am 5. März 1970, Vahlen 1971, p. 139; Saage-Maaß/Leifker, Haftungsrisiken deutscher Unternehmen und ihres Managements für Menschenrechtsverletzungen im Ausland, BB 2015, 2499; Säcker/Rixecker/Oetker/Limperg (ed.), Münchener Kommentar zum Bürgerlichen Gesetzbuch, vol. 6, 7th ed., commentary, C.H. Beck 2017; Saurer, Klimaschutz global, europäisch, national – Was ist rechtlich verbindlich?, NVwZ 2017, 1574; Schäfer/ Ott, Lehrbuch der ökonomischen Analyse des Zivilrechts, 5th ed., Springer Gabler 2012; Schmidt-Leithoff, Die Verantwortung der Unternehmensleitung, Mohr Siebeck 1989; Schmidt/Lutter (ed.), Aktiengesetz Kommentar, 3rd ed., commentary, Verlag Dr. Otto Schmidt 2015; Schneider, Compliance als Aufgabe der Unternehmensleitung, ZIP 2003, 645; Schön, Der Zweck der Aktiengesellschaft – geprägt durch europäisches Gesellschaftsrecht?, ZHR 180 (2016), 279; Seibt, 20 Thesen zur Binnenverantwortung im Unternehmen im Lichte des reformierten Kapitalmarktsanktionsrechts, NZG 2015, 1097; Shavell, Foundations of Economic Analysis of Law, Harvard University Press 2004; Spießhofer, Unternehmerische Verantwortung: zur Entstehung einer globalen Wirtschaftsordnung, Nomos 2017; Spießhofer, Was ist die “gesellschaftliche Verantwortung” von Unternehmen?, IWRZ 2019, 65; Spindler, Die Haftung von Vorstand und Aufsichtsrat für fehlerhafte Auslegung von Rechtsbegriffen, in: Heldrich/Prölss/Koller et al. (ed.), Festschrift für Claus-Wilhelm Canaris zum 70. Geburtstag, vol. II, C.H. Beck 2007, p. 403; Spindler/ Stilz (ed.), Kommentar zum Aktiengesetz, vol. 1, 4th ed., commentary, C.H. Beck 2019; Stober, Ist der Ehrbare Kaufmann der Schlüssel für Compliance-Anforderungen? NJW 2010, 1573; Szczekalla, Die sogenannten grundrechtlichen Schutzpflichten im deutschen und europäischen Recht, Duncker & Humblot 2002; Thole, Managerhaftung für Gesetzesverstöße – Die Legalitätspflicht des Vorstands gegenüber seiner Aktiengesellschaft, ZHR 173 (2009), 504; Tieves, Der Unternehmensgegenstand der Kapitalgesellschaft, Verlag Dr. Otto Schmidt 1998; Toggler, Wider die Verselbständigung der Begriffe: Compliance, Legalitätspflicht und Business Judgment Rule, in: Kalss/Toggler (ed.), Compliance, Beiträge zum 4. Wiener Unternehmensrechtstag (2015), Manz 2016, p. 97; Towfigh/Petersen (ed.), Ökonomische Methoden im Recht, 2nd ed., Mohr Siebeck 2017; Tröger, Konzernverantwortung in der aufsichtsunterworfenen Finanzbranche, ZHR 177 (2013), 475; Ulmer, Aktienrecht im Wandel – Entwicklungslinien und Diskussionsschwerpunkte –, AcP 202 (2002), 143; Verse, Compliance im Konzern – Zur Legalitätskontrollpflicht der Geschäftsleiter einer Konzernobergesellschaft, ZHR 175 (2011), 401; Vetter, Geschäftsleiterpflichten zwischen Legalität und Legitimität – Muss sich Ethik lohnen? –, ZGR 2018, 338; Vitzthum/ Proelß (ed.), Völkerrecht, 6th ed., De Gruyter 2013; Wagner, Haftung für Menschenrechtsverletzungen, RabelsZ 80 (2016), 717; Wagner, Schadensersatz bei Kartelldelikten, in: Eger/Schäfer (ed.), Ökonomische Analyse der europäischen Zivilrechtsentwicklung, Mohr Siebeck 2007, p. 605; Weber (ed.), Organpflicht und Rechtsdurchsetzung, Habilitation Thesis Munich 2019 (forthcoming); Weller/Kaller/Schulz, Haftung deutscher Unternehmen für Menschenrechtsverletzungen im Ausland, AcP 216 (2016), 387; Weller/ Thomale, Menschenrechtsklagen gegen deutsche Unternehmen, ZGR 2017, 509; Wendelstein, “Menschenrechtliche” Verhaltenspflichten im System des Internationalen Privatrechts, RabelsZ 83 (2019), 111; Windbichler (ed.), Gesellschaftsrecht, 24th ed., C.H. Beck 2017; Wundenberg (ed.), Compliance und die prinzipiengeleitete Aufsicht über Bankengruppen, Mohr Siebeck 2012; Zöllner, Unternehmensinnenrecht – Gibt es das?, AG 2003, 2; Zöllner/Noack (ed.), Kölner Kommentar zum Aktiengesetz, vol. 2/1, 3rd ed., Carl Heymanns Verlag 2009.

Contents I. Introduction ..................................................................................................... 1. Climate protection in current accounting and stock corporation law .................................................................................................................. 2. The company’s external and internal relationships............................ 3. Delimiting the object of study ................................................................. II. The perspective of economic analysis and legal functionalism............ 1. The internalization of negative externalities as a guidance objective ........................................................................................................ 2. Efficiency of lawfulness and compliance duties for legal enforcement ................................................................................................. III. Climate protection and current corporate law......................................... 1. Corporate management and the objectives of stock corporation law .................................................................................................................. a) Independent management as point of departure .......................... b) No direct constitutional and international legal limits ................ c) Statutory provisions..............................................................................

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Part 5. Liability for climate damages – Germany as an international pioneer? 2. Duty of lawfulness and compliance responsibility (under stock corporation law), §§ 91 (2), 93, 116 p. 1 AktG ................................... a) The stock corporation’s commitment to lawfulness and the management board’s compliance responsibility ............................ b) Scope of the duty of lawfulness and the duty to monitor lawfulness in connection with climate protection provisions..... aa) Duty of lawfulness ......................................................................... bb) Duty to monitor lawfulness......................................................... c) Conclusion .............................................................................................. 3. CSR reporting duties.................................................................................. a) Conception of the CSR directive ....................................................... b) Consequences of omitted and incorrect CSR explanations......... 4. CSR and corporate interest ...................................................................... a) Investor and consumer expectations ................................................ b) Managerial discretion and the duty of consideration................... IV. Conclusion and prospects .............................................................................

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I. Introduction 1. Climate protection in current accounting and stock corporation law 1

The increasingly intense debate about companies’ obligations in relation to climate and the environment and about their liability for climate damages confronts private law in general and corporate law in particular with fundamental challenges, which have been handled insufficiently to date. After the debate reached accounting law several years ago, in the shape of CSR reporting duties,1 it has recently been taken up in stock corporation law as well. Thus, under § 87 (1) cl. 2 AktG, in the ARUG II version2, the management board’s compensation structure must be oriented towards the “company’s sustainable and long-term development”. The recommendation by the Committee on Legal Affairs and Consumer Protection demonstrates that the revision is intended to express that the supervisory board “must also take social and ecological concerns into account” in the future.3 Beyond this, the preamble of the Code’s revised version, as resolved by the Government Commission on 16.12.2019 and which entered into force on 20.3.2020, reminds companies and their governing bodies in general that “with their actions, [they] must be aware of the enterprise’s role in the community and its responsibility vis-à-vis society” and that “social and environmental factors influence the enterprise’s success”.4 Since 2009 already, as proved by its Preamble, the Code “highlights” the obligation of the management board and supervisory board “to ensure the continued existence of the enterprise and its sustainable value creation”. Yet all of these descriptions are no more than forms of the “reputable businessperson”, or “ehrbarer Kaufmann”, a model already previously emphasized in the Preamble.5 The significance of these statements under stock corporation law is slight in any event, because they are not within the scope of the obligation to declare under § 161 AktG.6 1

On the CSR legislation also see under III. 3. Act on the Transposition of the Second Shareholder Rights Directive from 12.12.2019, Federal Law Gazette I 2637; in detail on § 87 (1) cl. 2 AktG current version Velte, NZG 2020, 12 et seq. 3 Bundestag publication 19/15153, 62. 4 Preamble DCGK 2019, available at https://www.dcgk.de/en/code.html. 5 In detail on this Fleischer, DB 2017, 2015 (2016); Stober, NJW 2010, 1573 (1574 et seq.); critically on this model as a legitimacy aspect of the code Fleischer, AG 2017, 509 (515); Merkt, ZIP 2014, 1705 (1707); German Bar Association – Committee for Commercial Law, NZG 2017, 57. 6 Representatively, see Koch, in: Hüffer/Koch (eds.), Aktiengesetz, 13th ed., 2018, § 161, mn. 8; critically Windbichler, Gesellschaftsrecht (corporate law), 24th ed., 2017, § 27, mn. 24. 2

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But also regardless of this, it is not possible to deduce, from such appeals, any satisfying answer to the question concerning a legal obligation of the companies and their managers in relation to environmental and climate protection interests, at least not prima vista. This question shall be focus of the present text.

2. The company’s external and internal relationships It goes without saying that companies are bound to the law in their external 2 relationships, so that they must respect climate protection concerns, insofar as these are supposed to be implemented by means of statutory provisions – for instance in the shape of emission limits. The question of a company’s external liability for climate damages imputed to greenhouse gas emissions belongs in this context as well, in particular under §§ 823 et seq., 1004 BGB7 or specific environmental liability law,8 as it is currently being heard in the action of the Peruvian mountain farmer Saúl Lliuya against the RWE AG before the Higher Regional Court of Hamm in Germany.9 However, from the outset, one must distinguish the company’s obligation to abide by 3 the statutory provisions addressed to it from the management board’s internal duty of lawfulness, that is, the duty to ensure that the company abide by the law. If it seems to be unanimously recognized that the company as such is bound to the law,10 several questions of a fundamental nature emerge in regard to the duty of lawfulness. Thus, for example, the question arises whether the management board is authorized or even obligated to make compliance arrangements to an extent that exceeds the company’s own interest in avoiding sanctions and other burdens. Must the management board perform its management task in strict accordance with the general interest in compliance – thus also with environmental legislation – or may it put this interest aside, with a view to the company’s opposed interests, and so accept a “useful” violation by the company and its sanctioning? Questions that are no less fundamental arise beyond legal provisions and so – with 4 reference to the managing director’s relationship to the company – beyond the duty of lawfulness. For inasmuch as the Code emphasizes the company’s social responsibilities and the model of the “reputable businessperson” in its preamble, it at least calls for considering general concerns – in a way that exceeds compliance with legal provisions 7

On this issue, see Part 5, T. German Environmental Liability Act of 10.12.1990, Federal Law Gazette I, 2634; in detail on this issue see Part 5, U. 9 Dismissing the action in the first instance LG Essen, judgment of 15.12.2016, file ref. 2 O 285/15; the OLG Hamm ordered to take evidence on 30.11.2017, file ref. 5 U 15/17, ZUR 2018, 118; on this Frank, NVwZ 2017, 664; Chatzinerantzis/Appel, NJW 2019, 881; on further cases Saage-Maaß, ECCHR/Brot für die Welt/MISEREOR (publ.), Unternehmen zur Verantwortung ziehen, 2nd ed., 2017, 6 et seq.; Habersack/ Ehrl, AcP 219 (2019), 155 (164 et seq.). 10 BGH, NJW 2012, 3439 mns 22 et seq.; BGH, NZG 2011, 1271 mns 16 et seq.; BGH, ZIP 2010, 1892 (1894); BGH, ZIP 2010, 2239 (2241); BGHZ 133, 370 (375); BGH, NJW 1988, 1321 (1323); LG München I, NZG 2014, 345 et seq.; Mertens/Cahn, in: Kölner Kommentar zum AktG, 3rd ed., 2009, § 93, mn. 71; Fleischer, in: Spindler/Stilz (eds.), Kommentar zum Aktiengesetz, 4th ed., 2019, § 93, mns 23 et seq.; Krieger/Sailer, in: Schmidt/Lutter (eds.), Aktiengesetz Kommentar, 3rd ed., 2015, § 93, mn. 6; Bayer, in: Schmidt, Legalitätspflicht der Unternehmensleitung, nützliche Gesetzesverstöße und Regress bei verhängten Sanktionen, 2009, 85 (90 et seq.); Habersack, in: Schneider, Die Legalitätspflicht des Vorstands der AG, 2011, 429 et seq.; Spindler, in: Canaris, Die Haftung von Vorstand und Aufsichtsrat für fehlerhafte Auslegung von Rechtsbegriffen, vol. II, 2007, 403 (412 et seq.); Thole, ZHR 173 (2009), 504 (509 et seq.); Verse, ZHR 175 (2011), 401 et seq.; critically Ihrig, WM 2004, 2098 (2105). See also Number 4.1.3 DCGK old version = principle 5 DCGK current version, which, for the purpose of presenting already current law, emphasizes that “the Management Board ensures that all provisions of law and internal policies are complied with, and endeavours to achieve their compliance by the enterprise”; in the German text, a parenthetical addition refers to this task as “compliance”. 8

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and prohibitions – as part of company actions and so also when exercising corporate discretion in the context of non-binding decisions. How far does this discretion extend? Can it intensify, becoming the managing director’s obligation to actively promote public (climate protection) interests beyond concrete legal provisions, by subordinating the interest in maximizing (short-term) yields to the common good in climate protection when making company decisions?11

3. Delimiting the object of study The following study will concentrate on corporate law and primarily concerns the internal relationship between the management board and the company. At its core, it hinges on the question of whether and, if applicable, to what extent the tools of corporate law can serve to implement the ecological interests of the common good and climate protection regulations. The focus will lie on the stock corporation (Aktiengesellschaft), since, given its capacity for stock market listing, its constitutional structure, and its economic relevance, it dominates the debate concerning the need of private companies and their managing directors to consider climate issues and other general concerns, and because, as emphasized above, initial regulatory approaches have been developed for it. 6 On the other hand, as is well known, the company with limited liability (Gesellschaft mit beschränkter Haftung) is characterized by the shareholders’ comprehensive jurisdiction and by the fact that the managing directors have a duty to comply with instructions in management matters.12 In turn, insofar as the shareholders in a company with limited liability decide on management matters, they do not act as officials beholden to corporate interests but in their capacity as economic owners of the corporate-operated enterprise and are therefore authorized to determine the company interest at their own discretion, within the legally and judicially developed mechanisms of creditor protection.13 5

II. The perspective of economic analysis and legal functionalism 1. The internalization of negative externalities as a guidance objective 7

Climate damages represent a negative externality of corporate activity. For there are negative externalities if an economic subject’s consumption or production decisions when using resources have a direct impact on the use and productivity of other resources and economic subjects – an impact that is neither compensated nor reflected in the cost accounting in question, i.e., not internalised. Such effects lead to a market failure, insofar as the party that creates a hazard and the producer of the externalities is not liable for damage to the environment or to other parties.14 This leads to “wrong” commodity prices, which do not reflect the actual lack of resources and also do not contain the social and ecological costs of damage and of threat prevention. If market 11 In detail on the responsibility for the public good in corporate law Habersack, AcP 220 (2020), 594 et seq. 12 Zöllner/Noack, in: Baumbach/Hueck (eds.), Limited Liability Companies Act (Gesetz betreffend die Gesellschaften mit beschränkter Haftung, GmbHG), 22nd ed., 2019, § 46, mns 89 et seq.; Altmeppen, in: Roth/Altmeppen (eds.), Limited Liability Companies Act (Gesetz betreffend die Gesellschaften mit beschränkter Haftung, GmbHG), 9th ed., 2019, § 37, mns 3 et seq. 13 Flume, Allgemeiner Teil des Bürgerlichen Rechts, vol. I/2: Die juristische Person, 1983, 61; Habersack, AcP 220 (2020), 594 (IV. 3. lit. b), there also on the legal situation for companies with limited liability that are subject to the German Codetermination Act (Mitbestimmungsgesetz). 14 Cf. Cooter/Ulen, Law and Economics, 6th ed., 2016, 39 et seq.; Morell, in: Towfigh/Petersen (eds.), Ökonomische Methoden im Recht, 2nd ed., 2017, mns 161 et seq.

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participants do not take the costs for the use of human and material resources – such as those of the environment and climate – into consideration when making production and consumer decisions, there is the risk that goods are produced and consumed which are harmful from an economic perspective. The “wrong” prices lead to wrong amounts and so to welfare losses.15 The market-driven allocation of resources is inefficient, and the party that creates a hazard conducts too many dangerous activities, with a level of activity that is thus too high.16 The internalization of (negative) externalities therefore designates a shift of these external additional costs to the decision processes, at the microeconomic calculation level, of the actual party that creates the hazard.17 Corresponding behavioural incentives may be offered primarily by classic means of 8 state regulation, in the form of externally imposed corporate sanctions and – provided that relevant bases for claims exist18 – with individual private-law sanctions and duties of care towards third parties in the association’s external relationships.19 The European Environmental Liability Directive from the year 2004 also explicitly addresses the economic criterion of internalizing externalities. Pursuant to art. 1, the goal of this directive is “to establish a framework of environmental liability based on the ‘polluterpays’ principle, to prevent and remedy environmental damage.”20 But the economic analysis of corporate office holders’ internal obligations under corporate law inquires whether an internal allocation of external sanctions and corporate obligations can produce relevant prevention and guidance incentives, which can then contribute effectively to legal implementation:21 The intention is to motivate the responsible corporate office holder to internalize the negative effects of corporate decisions for the climate and the environment.

2. Efficiency of lawfulness and compliance duties for legal enforcement An efficient enforcement of the legal order, also with the incentive to internalize 9 negative externalities, follows – clearly simplified on the basis of the so-called Kaldor/ Hicks criterion – the maxim of minimizing the costs of a legal violation for society as a whole, including the costs of fighting it.22 The welfare of society as a whole constitutes 15 Schäfer/Ott, Ökonomische Analyse des Zivilrechts, 5th ed., 2012, 81; Cooter/Ulen, Law and Economics, 6th ed., 2016, 39 et seq. 16 Cooter/Ulen, Law and Economics, 6th ed., 2016, 39 et seq.; fundamentally Schäfer, in: Ott/Schäfer (eds.), Allokationseffizienz in der Rechtsordnung, 1989, 2 et seq.; Wagner, in: Münchener Kommentar BGB, 7th ed., 2017, preliminary remarks before § 823, mn. 57. 17 On this, see again Schäfer/Ott, Ökonomische Analyse des Zivilrechts, 5th ed., 2012, 81; Cooter/Ulen, Law and Economics, 6th ed., 2016, 39 et seq.; specifically on environment externalities Danner/Theobald, Energy law (Energierecht), 103. addtl. supp. Oct. 2019, German Renewable Energy Sources Act (Erneuerbare-Energien-Gesetz) § 1 mn. 27. 18 On this issue, see already under I.2. as well as in Part 5, T., U., X. 19 Fundamentally on the preventive function of liability law Mataja, Das Recht des Schadensersatzes vom Standpunkt der Nationalökonomie, 1888, 19 et seq. and passim; Calabresi, The Costs of Accidents, 1970, 68 et seq. and passim; see also Kötz, in: Steindorff, Ziele des Haftungsrechts, 1990, 643 (645); Wagner, in: Münchener Kommentar BGB, 7th ed., 2017, preliminary remarks before § 823, mns 45 et seq.; Schäfer/Ott, Ökonomische Analyse des Zivilrechts, 5th ed., 2012, 150 et seq.; monographically in the context of interest here Möllers, Rechtsgüterschutz im Umwelt- und Haftungsrecht, 1996, passim. 20 Directive 2004/35/EC of 21 April 2004 on environmental liability with regard to the prevention and remedying of environmental damage OJ L 143/56; on this Schäfer/Ott, Ökonomische Analyse des Zivilrechts, 5th ed., 2012, 391. 21 Cf. Kraakman, 93 Yale L.J. (1984), 857 (865), who refers to the “prohibition of managerial risk shifting”. 22 Cf. Allen, Commentary on the Limits of Compensation and Deterrence in Legal Remedies, 60 Law & Contemporary Problems, 1997, 67 (68 et seq.); Easterbrook/Fischel, 52 U. Chi. L. Rev. (1985), 611 (612); Easterbrook/Fischel, The Economic Structure of Corporate Law, 1996, 316; cf. also Kraakman, 93 Yale L.J.

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the primary objective. Whether it is efficient, from the perspective of economic analysis and legal functionalism (which can only be touched upon here23), to employ internal lawfulness and compliance duties in order to urge companies’ managers to comply with legal climate protection regulations essentially depends on how we should evaluate the costs and the preventive usefulness of such duties in comparison to the other – private and state – approaches of legal enforcement.24 10 Assuming that with increasing intensity, all private and state approaches to enforcing legal commands and prohibitions are accompanied by increasing marginal costs and decreasing marginal use, it certainly seems possible that with appropriate dosage, management duties may contribute effectively, in a functional way, by offering a (supplemental) enforcement tool – also in regard to climate protection regulations.25 It is true that a guiding impetus linked to the internal relationship of the company and the liable corporate office holder runs the risk that the managing director may view the “useful” violation of climate protection regulations as “efficient”, even when taking damages to reputation and other sanctions into account.26 Yet it is already all but certain that such a legal violation is also efficient for society as a whole. In any event, the sanctions threatened by the legal orders do not reliably convey any information about the social costs of a legal violation, nor about the costs that befall society as a whole.27 Moreover, internal duties of the corporate office holders vis-à-vis the company and the accompanying prevention and guidance incentives for the corporate managers can compensate for the possibly deficient character of association sanctions as a means of control.28 A sanction threatening the company cannot readily ensure that the managing body avoids the sanction if the legal violation is in the interest of the company.29

(1984), 857 (867); see in distinction to the “pareto criterion” also Schäfer/Ott, Ökonomische Analyse des Zivilrechts, 5th ed., 2012, 19 et seq.; Weber, Organpflicht und Rechtsdurchsetzung, habilitation thesis Munich, 2019, passim, esp. § 5 A. II. 23 Detailed economic analysis of the duty of lawfulness in Weber, Organpflicht und Rechtsdurchsetzung, habilitation thesis Munich, 2019, Part 1 Chapter 3. 24 Ackermann, ZHR 179 (2015), 538 (547), accurately referring to the fact that “such performance comparisons between extrinsic guidance with sanctions and intrinsic guidance with corporate governance and compliance requirements presuppose knowledge of the costs and benefits of both mechanisms, from which the current state of the discussion is far removed.” 25 Fundamentally Kraakman, 93 Yale L.J. (1984), 857 (883 et seq.); cf. also Easterbrook/Fischel, The Economic Structure of Corporate Law, 1996, 316; Weber, Organpflicht und Rechtsdurchsetzung, habilitation thesis Munich, 2019, § 5 A. II., § 6 A. III. 26 Easterbrook/Fischel, The Economic Structure of Corporate Law, 37 et seq.; Weber, Organpflicht und Rechtsdurchsetzung, habilitation thesis Munich, 2019, § 5 D. II.; Gelter/Grechenig, Wirtschaftspolitische Blätter, 2010, 5 et seq.; implicitly also Wagner, in: Eger/Schäfer (eds.), Ökonomische Analyse der europäischen Zivilrechtsentwicklung, 2007, 605 (656); others see useful legal violations as expressions of a “deficient legal system”, Brock, Legalitätspflicht und Nützlichkeitserwägungen, 2017, 262 et seq. 27 Shavell, Foundations of Economic Analysis of Law, 2004, 488 et seq.; Cooter, 84 Colum. L. Rev. (1984), 1523 (1527); from the German perspective Fleischer, ZIP 2005, 141 (147). 28 In detail Weber, Organpflicht und Rechtsdurchsetzung, habilitation thesis Munich, 2019, § 6 A. II. 2. 29 On the principle-agent conflict Easterbrook/Fischel, The Economic Structure of Corporate Law, 1996, 91 et seq.; Bainbridge, Corporate Law, 2nd ed., 2009, 75; Hopt, in: FS Mestmäcker, Die Haftung von Vorstand und Aufsichtsrat – Zugleich ein Beitrag zur corporate governance-Debatte, 1996, 909 (914 et seq.); cf. also in this context Wagner, ZGR 2016, 112 (132 et seq.); Weber, Organpflicht und Rechtsdurchsetzung, habilitation thesis Munich, 2019, § 6 A. IV.

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III. Climate protection and current corporate law 1. Corporate management and the objectives of stock corporation law a) Independent management as point of departure. Under § 76 (1) AktG, the 11 management board must direct the company on its own responsibility and so without instructions.30 Correspondingly, § 93 (1) cl. 1 AktG establishes that “[i]n managing the affairs of the company, the members of the management board are to exercise the due care of a prudent manager faithfully complying with his duties”. But it is not explicitly regulated what objectives must guide the management board’s activity. Despite intensive debates31, the legislature abstained from adopting a “clause on the common good” when passing the Stock Corporation Act (AktG) in 1965 – a clause that had still been included in art. 70 AktG of 193732, and under which climate protection concerns could be subsumed as well where applicable. This omission stimulated the debate, which arose in the mid-1980s, on the essential nature of the shareholder-value concept.33 At any rate, it is certain that at least the company as such need not fear legal sanctions if it complies with climate and other general concerns only within the framework of legal provisions.34 To the extent that the reasons of the government draft on the AktG in 1965 state that the management board must evidently also consider the public’s concerns in its measures,35 the focus lies instead on the management board’s autonomy and duty of care and so on its relationship to the company. b) No direct constitutional and international legal limits. The previous statement 12 also applies when taking constitutional provisions into consideration. In 1994, with art. 20a GG, environmental protection within the meaning of preserving natural foundations of life was declared a state objective and thus a constitutional state task. Yet the guarantee under art. 20a GG is addressed only to state bodies, not to private parties. Art. 20a GG primarily contains a mandate that the legislature must act to protect the environment.36 Only laws passed in fulfilment of this mandate to act are therefore able to establish relevant rules and prohibitions concerning climate protection vis-à-vis private companies and their management bodies.37 This also applies when 30

See on this reasons, government draft, in: Kropff, Aktiengesetz, 1965, 97. Thiessen, in Görtemaker/Safferling (eds.), Die Rosenburg, 2nd ed., 2013, 236 et seq.; Kropff, in: Fleischer/Koch/Kropff/Lutter (eds.), 50 Jahre Aktiengesetz, 2016, 1 (2 et seq.); Koch, ibid., 65 (66 et seq., 73 et seq.). – The draft bill published in 1958 still adopted the fomulation of § 70 (1) AktG 1937 in a modified form, referring to the “common good”, see Kropff, in: Fleischer/Koch/Kropff/Lutter (eds.), 50 Jahre Aktiengesetz, 2016, 1 (3). 32 Under § 70 AktG of 1937, the management board had to “guide the company on its own responsibility as the good of the enterprise and its followers and the common benefit of the people and the Reich demand.” 33 On this debate see most recently Fleischer, ZGR 2017, 411 (412 et seq.) with further references; more recently also Ulmer, AcP 202 (2002), 143 (158 et seq.); Zöllner, AG 2003, 2 (7 et seq.); Kuhner, ZGR 2004, 244 (246 et seq.); Mülbert, in: Röhricht, Marktwertmaximierung als Unternehmensziel der Aktiengesellschaft, 2005, 421; Klöhn, ZGR 2008, 110 (136 et seq.); on the course of the debate, see also Fleischer, in: Spindler/Stilz (eds.), Kommentar zum Aktiengesetz, 4th ed., 2019, § 76, mns 21 et seq.; from the international discussion Hansmann/Kraakman, 89 Georgetown L.J. 439 (2001). 34 Cf. Habersack, AcP 220 (2020), 594 (II. 3.). 35 Reasons, government draft, in: Kropff, Aktiengesetz, 1965, 97 et seq. 36 Huster/Rux, in: Epping/Hillgruber (eds.), BeckOK Grundgesetz, 42nd ed., art. 20a GG, mns 1 et seq., 27 et seq.; Scholz, in: Maunz/Dürig (eds.), Basic Law commentary, 89. addtl. supp. Oct., art. 20a GG, mns 32 et seq., 44 et seq. 37 Generally on this BVerfGE 52, 1 (27); BVerfGE 56, 249 (260); cf. also Fleischer, in: Spindler/Stilz (eds.), Kommentar zum Aktiengesetz, 4th ed., 2019, § 76, mn. 42d; Kort, NZG 2012, 926 et seq.; Mülbert, AG 2009. 766 (772); Vetter, ZGR 2018, 338 (451). 31

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taking into account the social responsibility of property emphasized in art. 14 (2) GG. Contrary to voices encountered primarily in older scholarship, it is not possible to deduce the stock corporation’s responsibility for the common good from this social responsibility either.38 13 The same applies to climate protection provisions that arise from European Union law39 or international law, including in particular the Paris Agreement of 12.12.2015, which constitutes a follow-up agreement to the UN Framework Convention on Climate Change of 1992 with its “2 degree goal”.40 International treaties apply to the ratifying41 states, which constitute subjects under international law, and bind only the bearers of public authority in the relevant Treaty parties, not private-law subjects.42 This precludes not only a “direct third-party effect” but also the superimposition of constitutional and international guarantees on corporate interests and so the management board’s duty, on this basis, to exercise its discretion in accordance with climate protection concerns, including beyond legal rules and prohibitions. 14

c) Statutory provisions. To be mentioned only in passing here, what remains untouched is the stockholders’ power, for one, to explicitly recognize or expand, in the Articles of Association, the management board’s power to engage in activities that promote the common good and so also protect the climate in particular and, for another, to promote corporate activity oriented towards the common good by adopting sustainability aspects into the objects of the enterprise. In any event, regardless of the tense relationship between such clauses in the Articles of Association and the management board’s leadership autonomy, the shareholders cannot be denied such influence outright.43

2. Duty of lawfulness and compliance responsibility (under stock corporation law), §§ 91 (2), 93, 116 p. 1 AktG 15

a) The stock corporation’s commitment to lawfulness and the management board’s compliance responsibility. Management autonomy encounters its first and most significant restraint in the corporate office holders’ duty of lawfulness (Legalitätspflicht), already mentioned in the introduction (under I.2.). Firstly, the duty of lawfulness encompasses 38 In detail and with further references Habersack, AcP 220 (2020), 594 (III. 1.); but see also Rittner, in: Gessler, Zur Verantwortung des Vorstandes nach § 76 Abs. 1 AktG 1965, 1971, 139 (146 et seq.); SchmidtLeithoff, Die Verantwortung der Unternehmensleitung, 1989, 155 et seq.; from current scholarship Spindler, in: Münchener Kommentar AktG, 5th ed., 2019, § 76, mn. 66. 39 Cf. art. 191 TFEU. 40 Art. 2 para. 1 lit. a) Paris Agreement (‘PA’) available at https://unfccc.int/files/essential_background/ convention/application/pdf/english_paris_agreement.pdf; UN Framework Convention on Climate Change available at https://unfccc.int/resource/docs/convkp/conveng.pdf; generally on the binding regime of climate protection provisions in international law and European law Saurer, NVwZ 2017, 1574. 41 In Germany pursuant to art. 59 GG. 42 Cf. representatively art. 3 PA: “[A]ll Parties are to undertake and communicate ambitious efforts […] with the view to achieving the purpose of this Agreement as set out in Article 2.” Generally on the direct third-party effect Szczekalla, Die sogenannten grundrechtlichen Schutzpflichten im deutschen und europäischen Recht, 2002, 900 et seq. with a discussion of dissenting perspectives; Prieß, in: Delbrück et al. (eds.), Aus Kiel in die Welt: Kiel’s Contribution to International Law: essays in honour of the 100th anniversary of the Walther Schücking Institute for International Law, 2014, 635 (645 et seq.); Kau, in: Vitzthum/Proelß (eds.), Völkerrecht (international law), 6th ed., 2013, section 3, mns 76 et seq.; Hobe, Einführung in das Völkerrecht, 10th ed., 2014, 163 et seq. 43 In greater detail on scope and limits of relevant Articles of Association-clauses in the context of matters of the common good Habersack, AcP 220 (2020), 594 (IV. 4. lit. d) with further references. Generally on the issue of management and supervisory board being bound to the purpose indicated in the by-laws and the business object Kort, in: Großkommentar zum AktG, 5th ed., 2015, § 76, mn. 45; Tieves, Der Unternehmensgegenstand der Kapitalgesellschaft, 1998, 144 et seq.

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the obligation to behave in a law- and statute-abiding way when conducting one’s office and to let the legal duties and provisions that apply to the company guide one’s own organ activity, which can be attributed to the stock corporation.44 Another essential manifestation of the general duty of lawfulness is the duty of the management board’s members to ensure the company’s lawful conduct in external relations and so to take into account the company’s commitment to the law. Consequently, the management board must work to ensure that the company and subordinate employees do not commit any legal violations.45 Whether one refers to the duty to ensure compliance within the company as a “duty to monitor lawfulness” (Legalitätskontrollpflicht) or – which amounts to the same – as a “duty to enforce lawfulness” (Legalitätsdurchsetzungspflicht) or as a “duty to ensure lawfulness through organization” (Legalitätsorganisationspflicht):46 It should be viewed as a manifestation of the general duty of care under § 93 (1) cl. 1 AktG, constitutes a form of controlling the corporation, and applies to the management board members’ internal relation to the company.47 b) Scope of the duty of lawfulness and the duty to monitor lawfulness in connec- 16 tion with climate protection provisions. aa) Duty of lawfulness. The duty of lawfulness provides the fundamental insight that from the outset, the management board members of a German stock corporation must comply with climate protection provisions in their management. As a legal body, the stock corporation is subject to the same duties as other persons. But since stock corporations can only comply with these legal duties by way of their corporate members, the members must fulfil the duties for the legal body. Insofar as the management board must subsequently comply with a legal obligation shaped by law – and so precisely does not make any corporate decision –, the business judgment rule under § 93 (1) cl. 2 AktG also does not apply. There is “no safe harbour”48 for illegal conduct. Put differently, corporate discretion only exists within the framework of legal commands and prohibitions. Yet the question remains unresolved whether external unlawful conduct simulta- 17 neously represents an internal breach of duty, with the consequence that the management board member can avert liability towards the corporation under § 93 (2) AktG 44 Spindler, in: Münchener Kommentar AktG, 5th ed., 2019, § 93, mns 86 et seq.; Fleischer, Handbuch des Vorstandsrechts, 1st ed., 2006, § 7, mns 4 et seq.; Fleischer, in: Spindler/Stilz (eds.), Kommentar zum Aktiengesetz, 4th ed., 2019, § 93, mns 15 et seq., 23 et seq.; Habersack, in: Schneider, Die Legalitätspflicht des Vorstands der AG, 2011, 429 (431 et seq.). 45 LG München I, NZG 2014, 345 (346) – Siemens v Neuburger; from the literature Koch, in: Hüffer/ Koch (eds.), Aktiengesetz, 13th ed., § 76, mns 14 et seq.; Fleischer, in: Spindler/Stilz (eds.), Kommentar zum Aktiengesetz, 4th ed., 2019, § 91, mn. 48 (the obligation to monitor lawfulness belongs to the “assured inventory of the canon of duties in stock corporation law”); Fleischer, NZG 2014, 321 (322); Habersack, AG 2014, 1 (2); Hauschka, ZIP 2004, 877 (878); Koch, WM 2009, 1013; Koch, in: Hüffer/Koch (eds.), Aktiengesetz, 13th ed., 2018, § 76, mn. 13; Merkt, ZIP 2014, 1705, 1707; Verse, ZHR 175 (2011), 401 (403 et seq.); see also Schneider, ZIP 2003, 645 (648 et seq.); Grigoleit/Tomasic, in: Grigoleit (ed.), Aktiengesetz Kommentar, 2013, § 93, mn. 23; Spindler, in: Münchener Kommentar AktG, 5th ed., 2019, § 93, mn. 115; but also see – “expression of the rule to prevent damages that can be inferred from §§ 76, 93 AktG” – Wundenberg, Compliance und die prinzipiengeleitete Aufsicht über Bankengruppen, 2012, 125; in this respect also Torggler, in: Kalss/Torggler (eds.), Compliance, 97 (100 et seq.). 46 On the terminology for ex. Verse, ZHR 175 (2011), 401 (403 et seq.) (“duty to monitor lawfulness”); Harbarth, ZHR 179 (2015), 136 (145) (“duty to enforce lawfulness”); Grigoleit, in: Schmidt, Begründungslinien der Legalitätsverantwortung im Kapitalgesellschaftsrecht, 2019, vol. I, 367 (“duty to ensure lawfulness through organization”). 47 In greater detail Hopt/Roth, in: Großkommentar zum AktG, 5th ed., 2015, § 93, mns 74 et seq., 132 et seq.; Koch, in: Hüffer/Koch (eds.), Aktiengesetz, 13th ed., 2018, § 76, mn. 12; Spindler, in: Münchener Kommentar AktG, 5th ed., 2019, § 93, mns 86 et seq. 48 Reasons, government draft UMAG Bundestag publication 15/5092, 11; cf. also Bicker, AG 2014, 8 (9); Spindler, in: Münchener Kommentar AktG, 5th ed., 2019, § 93, mn. 88.

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only by referring to the absence of fault or damage.49 This is the position of prevailing opinion,50 which, provided that it even gives reasons,51 in part merely refers to the fact that disadvantages in the form of fines, compensation for damages, or losses of reputation can arise for the company as a result of the rule infringement and the infringement is thus a disadvantage for the company per saldo, that is to say, also considering possible advantages.52 This argument is not entirely convincing, as it ultimately infers the breach of duty from the presence of a damage.53 Instead, what is conceivable and, particularly in relation to climate protection provisions, surely not mere theory is that an infringement of climate protection regulations occurs in the company’s interest and that the risk of discovery and prosecution is negligible in comparison to the prospective advantage. Nevertheless, the corporate office holders’ duty of lawfulness must, in principle, extend to legal infringements – save for trivial violations – that are “useful” from the company’s perspective54, so that it is not possible to deny that the management board has breached a duty in that respect either. This duty can be inferred most easily55 from the public interest in legal enforcement.56 The responsible corporate office holder then remains at liberty to avert a compensation liability by pointing out advantages that accompany the legal violation.57 Yet even if this is successful, it does not affect the breach of duty, so that the management board member risks being dismissed and refused discharge. 18

bb) Duty to monitor lawfulness. The duty to monitor lawfulness aims to counteract legal violations – also those of environmental laws – committed by employees and other agents from within the company. Like the duty of lawfulness, it is thus founded in the public interest in legal enforcement; the difference lies in the fact that the management board can only influence the conduct of subordinate employees and other agents to a limited extent. Before this background, the process of establishing and developing such

49 Cf. BGH, NZG 2011, 1271 mns 16 et seq.; BGHZ 202, 26 mns 23 et seq. = NZG 2014, 1058; in greater detail Negenborn, Bankgesellschaftsrecht und Sonderkonzernrecht, 2019, 150 et seq. with further references. 50 BGH, NJW 2011, 88 mn. 37; NZG 2010, 1190 mn. 29; OLG Karlsruhe, NZG 2013, 1177 (1178 et seq.); Fleischer, in: Spindler/Stilz (eds.), Kommentar zum Aktiengesetz, 4th ed., 2019, § 93, mn. 24; Hopt/ Roth, in: Großkommentar zum AktG, 5th ed., 2015, § 93, mn. 74; Koch, in: Hüffer/Koch (eds.), Aktiengesetz, 13th ed., 2018, § 93, mn. 6; Mertens/Cahn, in: Kölner Kommentar zum AktG, 3rd ed., 2009, § 93, mn. 71; Lutter, ZIP 2007, 841 (844); Abeltshauser, Leitungshaftung im Kapitalgesellschaftsrecht, 1998, 213; with differentiations Grigoleit/Tomasic, in: Grigoleit (ed.), Aktiengesetz Kommentar, 2013, § 93, mns 9 et seq. 51 Case law in particular assumes the existence of a duty of lawfulness without stating reasons, see BGH, NJW 2011, 88 mn. 37; NZG 2010, 1190 mn. 29. 52 Raiser/Veil, Recht der Kapitalgesellschaften, 6th ed., 2015, § 14, mn. 81. 53 Thus also Fleischer, in: Spindler/Stilz (eds.), Kommentar zum Aktiengesetz, 4th ed., 2019, § 93, mn. 24. 54 On the economic background cf. already Number II. 2. 55 For derivation from § 396 AktG see Fleischer, ZIP 2005, 141 (148 et seq.); furthermore Thole, ZHR 173 (2009), 504 (514 et seq.), who emphasizes creditors’ interests; in detail on current opinion Brock, Legalitätspflicht, 2017, 48 et seq.; Habersack, in: Schneider, Die Legalitätspflicht des Vorstands der AG, 2011, 429 (432 et seq.); Weber, Organpflicht und Rechtsdurchsetzung, habilitation thesis Munich, 2019, § 1 C. and in detail in § 10; Breitenfeld, Organschaftliche Binnenhaftung, 2016, 49 et seq. 56 See already Habersack, in: Schneider, Die Legalitätspflicht des Vorstands der AG, 2011, 429 (435); Habersack, AcP 220 (2020), 594 (V. 2.); thus also Grigoleit, in: Schmidt, Begründungslinien der Legalitätsverantwortung im Kapitalgesellschaftsrecht, 2019, vol. I, 367 (371 et seq.); Koch, in: Hüffer/ Koch (eds.), Aktiengesetz, 13th ed., 2018, § 93, mn. 6; Fleischer, in: Spindler/Stilz (eds.), Kommentar zum Aktiengesetz, 4th ed., 2019, § 93, mns 24, 36; developing this further Weber, Organpflicht und Rechtsdurchsetzung, habilitation thesis Munich, 2019, § 10; see also Harbarth, ZHR 179 (2015), 136 (146 et seq.); Tröger, ZHR 177 (2013), 475; Seibt, NZG 2015, 1098 (1100 et seq.). 57 BGH, NJW 2013, 1958 mn. 26; BGH, NZG 2011, 1271 mn. 31.

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a compliance system thus moves in the field of tension between the strict duty of lawfulness and corporate discretion.58 The Regional Court of Munich I gave an initial shape to compliance duty in its 2014 19 Siemens/Neubürger decision.59 While the details may be contested, it is nevertheless widely recognized that the corporate office holders have a general legal duty, at least in larger share capital companies, to provide a compliance structure.60 Thus, generally speaking, the DCKG accurately outlines current legislation in its principle 5 (= number 4.1.3. DCGK old version). But the obligation to make compliance arrangements is not unlimited. The measures demanded as a result are subject to the reservations of what is necessary and reasonable. This entails that the management board must be granted the privilege of § 93 (1) cl. 2 AktG concerning the structure of the compliance system and the decision on concrete compliance measures and that it must be decided from the ex ante perspective whether a breach of duty to organize exists.61 Here, it is true for environment- and climate-related legal provisions as well that the 20 development of compliance structures must bear in mind the kind, size, and organization of the company, the material and regional risk associated with the concrete corporate activity and the company’s “compliance history”.62 Potentially hazardous production processes or products that pose an increased risk of climate damages and violations of climate protection provisions as well as ecologically sensitive geographical locations thus require more intensive compliance measures. c) Conclusion. Deriving the duty of lawfulness and the duty to monitor lawfulness 21 from public interest shows that the company’s commitment to legal (climate protection) provisions is superimposed on the internal relationship to the corporate organ’s member and that the standard that the organ’s member must follow shifts, in this respect, from the corporate interest to the common interest in compliance. Tools of corporate law, such as establishing a duty of care reinforced by compensation obligations, in other words already de lege late serve the public interest in following for ex. climate protection provisions and so contribute to the “private enforcement” of legal rules.63

3. CSR reporting duties a) Conception of the CSR directive. The question about the relevance of climate 22 protection interests in corporate management, also beyond concrete legal provisions and so beyond the limits of the duties of lawfulness and compliance, is, at least initially, 58 Spindler, in: Münchener Kommentar AktG, 5th ed., 2019, § 91, mn. 52, § 93, mn. 115; Habersack, AcP 220 (2020), 594 (V. 1. lit. b, V. 3. lit. b). 59 LG München I, NZG 2014, 345; in detail on this Fleischer, NZG 2014, 321; Bachmann, ZIP 2014, 579. 60 Arnold, ZGR 2014, 76 (78 et seq.); Bürgers, ZHR 179 (2015), 173 (175 et seq.); Fleischer, AG 2003, 291 (299); Fleischer, NZG 2014, 321 (322 et seq.); Goette, ZHR 175 (2011), 388 (392 et seq.); Habersack, in: Möschel, Gedanken zur konzernweiten Compliance-Verantwortung des Geschäftsleiters eines herrschenden Unternehmens, 2011, 1175 et seq.; Verse, ZHR 175 (2011), 401 (403 et seq.); Mertens/Cahn, in: Kölner Kommentar zum AktG, 3rd ed., 2009, § 91, mn. 35; Fleischer, in: Spindler/Stilz (eds.), Kommentar zum Aktiengesetz, 4th ed., 2019, § 91, mns 47 et seq. in each case with further references; but see Koch, in: Hüffer/Koch (eds.), Aktiengesetz, 13th ed., 2018, § 76, mns 13 et seq.; generally cautious Böttcher, NZG 2011, 1054 as well as Kremer/Klahold, ZGR 2010, 113 (118 et seq.). 61 Cf. Spindler, in: Münchener Kommentar AktG, 5th ed., 2019, § 91, mn. 52, § 93, mn. 115; Fleischer, NZG 2014, 321 (324); Ott, ZGR 2017, 149 (164 et seq.); Immenga, in: FS Schwark, Compliance als Rechtspflicht nach Aktienrecht und Sarbanes-Oxley-Act, 2009, 199 (203) with further references; see also Habersack, AcP 220 (2020), 594 (V. 3. lit. b). 62 LG München I, NZG 2014, 345 (347); Spindler, in: Münchener Kommentar AktG, 5th ed., 2019, § 93, mn. 115; Koch, in: Hüffer/Koch (eds.), Aktiengesetz, 13th ed., 2018, § 76, mn. 14. 63 In greater detail Habersack, AcP 220 (2020), 594 (V. 2. lit. c).

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tantamount to the question of corporate social responsibility (CSR).64 The CSR Directive (which amends the Accounting Directive) of 22.10.201465 – stemming from the 2011 EU strategy paper “A renewed EU strategy 2011‐2014 for Corporate Social Responsibility” – provided the strongest normative consolidation of the CSR concept. It states that companies of public interest and so in particular large share capital companies, which are oriented towards the capital market and have more than 500 employees, must inform the public about non-financial CSR aspects of their activities as well.66 Environmental, social, and employee concerns are among these reportable issues, as are the respect for human rights and the fight against corruption and bribery. At the same time, the companies must also present the effects of their activities on the aspects listed above, including the utilized processes of due diligence. If the aforementioned CSR concepts are lacking, for instance with regard to environmental protection, the company must offer a “clear and reasoned” explanation for this in the status report.67 In addition, parent companies have an obligation to deliver a consolidated non-financial declaration.68 In Germany, the relevant reporting duties have been regulated by the Transparency Directive Implementation Act of 11.4.201769: for capital market-oriented companies in §§ 289b et seq., 315b et seq. HGB, for financial institutions in §§ 340a (1a), 340i (5) HGB, and for insurance companies in §§ 341a (1a), 341j (4) HGB. 23 As evidenced by its recitals 1 and 2, the Directive aims to improve transparency regarding ecological issues and to support “change towards a sustainable global economy by combining long-term profitability with social justice and environmental protection.” To offer companies incentives, the European legislature falls back on the familiar regulatory technique of “comply or explain”, which, by means of transparency and the concomitant selection and guidance processes of the involved market participants, seeks to incentivize the self-regulation and the improvement of the reporting company’s own activities.70 Yet it is not possible to infer, either from the CSR Directive or from the German Implementation Act that the companies with a reporting duty and their bodies have the more extensive duty to actually pursue the CSR issues listed in the CSR Directive.71 24 With its purely reporting-related approach, the CSR Directive differs conceptionally from the – admittedly entirely non-binding – OECD Guidelines for Multinational

64 A thorough treatment of the development and conceptions of the CSR debate in Spießhofer, Unternehmerische Verantwortung, 2017, 45 et seq. 65 Directive 2014/95/EU of the European Parliament and of the Council of 22 October 2014 amending Directive 2013/34/EU as regards disclosure of non-financial and diversity information by certain large undertakings and groups, Federal Gazette no. L 330/1; on this Fleischer, AG 2017, 509 (521 et seq.); Hennrichs, ZGR 2018, 206. 66 Art. 19a para. 1 Accounting Directive in the version of the CSR Directive. 67 Art. 19a para. 1 Accounting Directive; implementation in German law in § 289c (4) of the German Commercial Code (Handelsgesetzbuch, HGB). 68 Art. 29a Accounting Directive. 69 Federal Law Gazette I, 802; on this Mock, ZIP 2017, 1195 et seq. and in greater detail under IV. 4. b). 70 Schön, ZHR 180 (2016), 279, 283 (“sophisticated” indirect behaviour control); generally on the functioning of the comply-or-explain mechanism Habersack, Staatliche und halbstaatliche Eingriffe in die Unternehmensführung, Report E for the 69th Association of German Jurists, 2012, 50 et seq. 71 See, for the reporting duties defined in §§ 289c, 315c HGB as a means of implementing the CSR Directive, reasons, government draft, Bundestag publication 547/16, 53 (“The share capital company must itself decide how it wants to treat non-financial topics as well as whether and how it will develop and implement a relevant concept”); Bachmann, ZGR 2018, 231, 233 et seq.; Fleischer, AG 2017, 509 (522); Mock, ZIP 2017, 1195 (1196); Schön, ZHR 180 (2016), 279 (285 et seq.); but also – for the recognition of non-financial objectives as independent corporate objectives – Hommelhoff, in: Kübler, Nichtfinanzielle Ziele in Unternehmen von öffentlichem Interesse, 2015, 291 (295 et seq.).

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Enterprises, the UN Global Compact, and the ISO 26000:2010.72 The OECD Guidelines in particular address the responsibility of multinational enterprises for the environment and provide for the establishment of an environmental management system, the reduction of greenhouse gas emissions, as well as the introduction of emergency plans to prevent environmental damages.73 The Global Compact74 in turn contains ten programmatically formulated fundamental principles, among them environmental protection, to which the participating companies commit themselves and upon which they are supposed to report annually. b) Consequences of omitted and incorrect CSR explanations. The reporting duty is 25 directed towards the share capital company as such. But the fulfilment of the reporting duty and the duty that necessarily accompanies it, to decide (not) to pursue certain (which?) CSR issues, constitutes one of the management tasks for which the management board is responsible under § 76 (1) AktG.75 The result is that all relevant breaches of duty by individual management board members obligate them to pay the company damages under § 93 (2) AktG. But since the duties arising from §§ 289b et seq., 315b et seq. HGB are limited to first developing and then reporting the company’s CSR policy, the management board also acts in accordance with these rules if it decides against pursuing CSR issues and proclaims this under § 289c (4) HGB. This then precludes a liability because of incorrect CSR reporting.

4. CSR and corporate interest a) Investor and consumer expectations. The above statement leads directly to the 26 question whether refraining from compliance with CSR matters in general and climate concerns in particular corresponds to the corporate interest or whether the management board, in the context of its managerial work, is not required or at least authorized to attend to such matters, including beyond legal provisions. The problem is one of management autonomy and the management board’s responsibility under §§ 76 (1), 93 (1) cl. 1 AktG and must be seen not least in light of the fact that the investment guidelines of major institutional investors provide standards for sustainable and ethical investment behaviour.76 Thus, it recently emerged that the Norwegian fund NBIM, which manages assets of approximately 1 trillion dollars, pulled out of 72 In greater detail Spießhofer, IWRZ 2019, 65 (67 et seq.); Spießhofer, in: Hauschka/Moosmayer/Lösler (eds.), Corporate Compliance, 3rd ed., 2016, § 11, mns 10 et seq.; in the context of liability for human rights violations Habersack/Ehrl, AcP 219 (2019), 155 (164 et seq.); Wagner, RabelsZ 80 (2016), 717 (722 et seq.). 73 OECD Guidelines for Multinational Enterprises (2011), No. VI, available at https://www.oecd.org/ daf/inv/mne/oecdguidelinesformultinationalenterprises.htm; on this Spießhofer, in: Hauschka/Moosmayer/Lösler (eds.), Corporate Compliance, 3rd ed., 2016, § 11, mns 24 et seq. 74 United Nations Global Compact, available at https://www.unglobalcompact.org. 75 Fleischer, AG 2017, 509 (522); for a catalogue of the management and supervisory boards’ duties see Bachmann, ZGR 2018, 231 (235 et seq.). 76 Vanguard, About Vanguard: Investment Stewardship: Vanguard Principles and Policies, Responsible Investment Policy, available at https://about.vanguard.com/investment-stewardship/principles-policies/ (last consulted 16.9.2019); Government Pension Fund of Norway, Government Pension Fund Global, Asset Manager Perspective 01/2018, The Sustainable Development Goals and the Government Pension Fund Global, available at https://www.nbim.no/contentassets/092e192d14d34d8eaf6110b75a27977c/nbim_amp_1_18_the-sdgs-and-the-gpfg.pdf (last consulted 16.9.2019); Allianz Global Investors, Sustainability, Business Integration, Our ESG Approach, available at https://www.allianz.com/en/sustainability/ business-integration/esg-approach.html (last consulted 16.9.2019), MEAG MUNICH ERGO AssetManagement GmbH, Inform: Vision & Culture: Sustainability, available at https://www.meag.com/en/inform/ philosophie.html (last consulted 16.9.2019); see also the appeal by O. Bäte (CEO of Allianz SE) in F.A.Z. no. 222/2019 of 24.9.2019, 19.

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240 companies, because they did not satisfy its principles for responsible management.77 This goes hand in hand with the fact that in spring of 2018, as part of its CSR strategy, the EU Commission submitted an action plan to finance sustainable growth as well as three additional follow-up proposals of regulations.78 Furthermore the Commission’s “European Green Deal” provides for investment support for environmentally friendly technologies.79 27 With the decree of the Regulation on sustainability-related disclosures in the financial services sector and the Regulation amending Regulation (EU) 2016/1011 as regards EU Climate Transition Benchmarks, both of 27 November 2019, and also the Regulation on the establishment of a framework to facilitate sustainable investment of 18 June 2020, words were turned into first deeds.80 The Commission has even considered intensifying the existing duties of disclosing non-financial information in regard to a sustainability strategy that encompasses the supply chain and clarifying the rules which instruct the managing director to be guided by long-term corporate interest.81 The latter would concern the core area of corporate law. But even regardless of such intentions on the part of the Commission, it can already be established not only that equity investors and outside creditors increasingly comply with the sustainability strategies of the companies seeking capital but also that final consumers and employees integrate CSR issues into their contractual activities.82 28

b) Managerial discretion and the duty of consideration. Given this atmosphere, it is probably not very realistic – already with view to the otherwise looming damage to reputation – that a company oriented towards the capital market announces that it has no CSR concept whatsoever. The management board of a company that is subject to the CSR reporting duty instead must include the general concerns presented to the company in diverse ways, and so not least also climate and environmental aspects, in its decision on the “whether” and “how” of a CSR concept and then adapt these to the consequences that arise in particular for its corporate reputation and financing, for product sales and services, as well as for the work environment and its attractiveness as an employer. The general interests pursued by the CSR duties, and so also climate concerns in particular, thus do contribute to the management board’s executive decisions, albeit only indirectly, namely mediated by the company’s relevant vested 77 Börsen-Zeitung no. 24/2019 of 3.7.2019, 13; on this and on other investors Vetter, ZGR 2018, 338 (360 et seq.). 78 Commission action plan on financing sustainable growth, COM(2018) 97 final of 17.3.2018; also Proposal for a Regulation of the European Parliament and of the Council on the establishment of a framework to facilitate sustainable investment, COM(2018) 353 final of 24.5.2018; Proposal for a Regulation of the European Parliament and of the Council on disclosures relating to sustainable investments and sustainability risks, COM(2018) 354 final of 24.5.2018; Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU) 2016/1011 on low carbon benchmarks and positive carbon impact benchmarks, COM(2018) 355 final of 24.5.2018; in greater detail on this Bortenlänger/Heldt, in: Seibert, Paradigmenwechsel im Gesellschaftsrecht? Vom ‘Aktienamt’ zum ‘Nachhaltigkeitsamt’, vom Konzessionssystem zur ‘Social Licence to Operate’, 2019, 147 et seq.; Möslein/ Mittwoch, WM 2019, 481 et seq.; Lanfermann, BB 2019, 2219 et seq. 79 Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on the European Green Deal, COM(2019) 640 final of 11.12.2019. 80 Regulation (EU) 2019/2088, Federal Law Gazette no. L 317/1; Regulation (EU) 2019/2089, Federal Law Gazette no. L 317/17; Regulation (EU) 2020/852, Federal Law Gazette no. L 198/13. 81 In detail on the proposals that concern companies Möslein/Mittwoch, WM 2019, 481 (487 et seq.). 82 In detail on this as well as on the developments in the USA, among them particularly the ‘Statement on the Purpose of a Corporation’ of the 181 CEOs of the major US companies united in the “Business Roundtable” on 19.8.2019 (available at: https://www.businessroundtable.org/business-roundtable-redefines-the-purpose-of-a-corporation-to-promote-an-economy-that-serves-all-americans; on this The Economist of 24.8.2019, 16 et seq.), Habersack, AcP 220 (2020), 594 (IV. 4).

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interests, and only in a “custom-fit” manner, that is, in a way that is tailored to the circumstances of the concrete company. In that sense, the CSR reporting duties aim to synchronize corporate and general interests but not to obligate the management board, in fulfilling its management task, to consider general concerns – specifically: climate concerns – also regardless of congruent corporate concerns.83 This demonstrates that the same applies to the management board of a company without reporting duties: it, too, must regularly consider the effects of its actions on climate issues when carrying out corporate decisions. Within the framework of corporate decisions, climate and other CSR concerns 29 therefore must enter into the management board’s considered decision, particularly if they have effects on corporate reputation. Yet if the management board is convinced that the direct economic implications in the form of reduced production costs justify (or perhaps even demand) accepting damaging but not forbidden effects for climate and the environment, then this decision will generally – assuming the requirements of § 93 (1) cl. 2 AktG84 are fulfilled – be covered by corporate discretion. A duty to correct the discretion thus exercised and, contrary to corporate economic interests, make a decision in the interest of the common good, cannot be justified de lege lata.85 The balancing decision expected of the management board must simply consider the potential climate concerns affected by the concrete corporate decision as well as their impact on the stock corporation. Seen in this light, climate issues and other general concerns do not occupy a special role. Rather, they constitute one component of the information that the management board must obtain if it wants to enjoy the privilege of the business judgment rule of § 93 (1) cl. 2 AktG.86 By contrast, the weighing of general concerns together with the impact on the stock corporation is part of the balancing decision and already passes the muster of content review if it does not appear untenable from the ex ante perspective that applies under § 93 (1) cl. 2 AktG.87 With this proviso, the management board is thus allowed to consider climate issues and other general concerns even beyond statutory requirements.88 What specifically constitutes the limits of the company’s promotion of concerns of 30 the public good cannot and need not be explored in detail here.89 The management board must at any rate consider the minimum objective of the lasting profitability of the enterprise run by the company and as a result limit its engagement to an appropriate measure, taking the company’s size and financial situation into account.90 Beyond this, it must pay attention to the conditions that § 93 (1) cl. 1, 2 AktG lays down for a oneoff decision. In addition to producing an adequate basis of information, which also takes 83

In detail on this as well as on what follows Habersack, AcP 220 (2020), 594 (IV. 4.). On this immediately in the main text. 85 Habersack, AcP 220 (2020), 594 (IV. 4. lit. b); likewise Kort, NZG 2012, 926; Spindler, in: Münchener Kommentar AktG, 5th ed., 2019, § 76, mns 82 et seq.; Grigoleit/Tomasic, in: Grigoleit (ed.), Aktiengesetz Kommentar, 2013, § 93, mns 6 et seq. 86 In detail Habersack, AcP 220 (2020), 594 (IV. 4. lit. b); generally on this Grigoleit/Tomasic, in: Grigoleit (ed.), Aktiengesetz Kommentar, 2013, § 93, mns 34 et seq.; Koch, in: Hüffer/Koch (eds.), Aktiengesetz, 13th ed., 2018, § 93, mns 20 et seq. with extensive references; also BGH, NZG 2017, 116 mn. 34. 87 Koch, in: Hüffer/Koch (eds.), Aktiengesetz, 13th ed., 2018, § 93 mns18, 23 with extensive references. 88 BGHZ 23, 150, 157; BGH, NJW 2002, 1585 (1586); BGH, NZG 2018, 1189 mn. 54; in detail Vetter, ZGR 2018, 338 (354 et seq.); Habersack, AcP 220 (2020), 594 (IV. 4. lit. c). 89 In detail Habersack, AcP 220 (2020), 594 (IV. 4. lit. c), Vetter, ZGR 2018, 338 (354 et seq.), both also discuss the question whether activities in the interest of the common good require disclosure; also Fleischer, AG 2001, 171 et seq.; Mertens, AG 2000, 157 et seq.; Vetter, ZGR 2018, 338 (366 et seq.); Rittner, in: Gessler, Zur Verantwortung des Vorstandes nach § 76 Abs. 1 AktG 1965, 1971, 139 (154 et seq.); on the risks under criminal law (breach of trust) see BGH, NJW 2002, 1585 et seq.; LG Bonn, NJW 2001, 1736. 90 Cf. in connection with donations BGH, NJW 2002, 1585 (1587). 84

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into consideration the impact on the company of actions in the interest of the common good91, this includes the exclusive orientation towards the corporate good and so the appropriate treatment of potential conflicts of interest.92

IV. Conclusion and prospects Already now, climate protection aspects play a key role in the practice of listed companies in particular. In addition to the company’s – self-evident – commitment to environmental legislation and the management board’s resulting duty of lawfulness and compliance, the CSR reporting duties, above all, prompt the management board to respond to the question of a sustainability strategy and the treatment of climate risks. Beyond this, by means of investors’ expectations in particular, but also those of job applicants and consumers, climate aspects already constitute a significant part of the management board’s management discretion, within the framework of corporate decisions: Protecting climate and environmental aspects serves to improve corporate reputation – conversely, ignorance can and will inflict damage on the company. 32 To be seen not least in this light is the fact that in February 2019, the German Federal Ministry for Economic Cooperation and Development submitted a draft of a “basic law regulating human rights and environmental due diligence in global value chains”93, which enforces the “National Action Plan: Implementation of the UN Guiding Principles on Business and Human Rights (2016–2020)”94 passed by the federal government on 21 December 2016. The draft establishes every company’s general environmental due diligence in its § 4 (3) and concomitant individual duties in §§ 5 et seq.95 The “fundamental requirements of environmental protection” regulated in § 3 no. 8 of the draft and the avoidance of environmental damages within the meaning of § 3 no. 9 of the draft are the object of such environmental due diligence. Where sanctions are concerned, the draft not only provides for fines, penalties, and the exclusion from public contracts but also establishes liability under private law, whereby the duties from §§ 4 to 10 regulate, in the context of non-contractual liability claims, “the relevant due diligence requirements regardless of the law applicable to the non-contractual obligation under private international law, and without the possibility of derogation”.96 However, such liability would depart from the conceptional foundations of §§ 823 et seq. BGB and should therefore be considered a last resort at most and so only if other mechanisms 31

91

See on this already under IV. 4. b). In detail Mertens/Cahn, in: Kölner Kommentar zum AktG, 3rd ed., 2009, § 76, mn. 34; generally on the treatment of conflicts of interest in connection with the business judgment rule of § 93 (1) cl. 2 AktG Hopt/Roth, in: Großkommentar zum AktG, 5th ed., 2015, § 93, mns 90 et seq. 93 https://www.business-humanrights.org/en/german-development-ministry-drafts-law-on-mandatoryhuman-rights-due-diligence-for-german-companies; last consulted on 30.11.2019. 94 Available at https://www.auswaertiges-amt.de/en/aussenpolitik/themen/aussenwirtschaft/wirtschaftund-menschenrechte; last consulted on 30.11.2019; on the United Nations Guiding Principles referenced in the title of the NAP see Habersack/Ehrl, AcP 219 (2019), 155 (173 et seq.) with further references; also Humbert, ZGR 2018, 295 (301 et seq.). 95 Namely risk analysis, preventive and remedial measures; compliance officer, complaints mechanism, protection of informants; documentation and reporting. 96 On the conflict-of-laws background of this draft regulation see, in connection with climate actions, Lehmann/Eichel, RabelsZ 83 (2019), 77 et seq.; in connection with human rights violations Habersack/ Ehrl, AcP 219 (2019), 155 (190 et seq.); Mansel, ZGR 2018, 439 et seq.; Saage-Maaß/Leifker, BB 2015, 2499 (2501 et seq.); Wagner, RabelsZ 80 (2016), 717 (739 et seq.); Weller/Kaller/Schulz, AcP 216 (2016), 387 (393 et seq.); Weller/Thomale, ZGR 2017, 509 (523 et seq.); Wendelstein, RabelsZ 83 (2019), 111 (121 et seq.). 92

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have failed to enforce human rights guarantees.97 One must think primarily of the managers’ due diligence under corporate law. It has already been suggested elsewhere98 that § 91 (2) AktG should obligate the management board to direct possible monitoring systems also to prohibit human rights violations in the supply chain, which are detrimental to the company’s reputation. This proposal may easily be extended to include climate and environmental aspects. Ultimately, such a regulation would be at most of a motivating and, when examined closely, only of a clarifying nature, but it would certainly be suited to concretizing the relevant duties of the management board and sensitizing the stockholders in this regard. 97 Habersack/Ehrl, AcP 219 (2019), 155 (190 et seq., 205); similarly Wagner, RabelsZ 80 (2016), 717 (780 et seq.); for corporate constellations also Fleischer/Danninger, DB 2017, 2849 (2856 et seq.); but also Payandeh, in: FS K. Schmidt, Deliktische Haftung von Unternehmen für transnationale Menschenrechtsverletzungen, 2019, vol. II, 131 (139 et seq.). 98 Habersack/Ehrl, AcP 219 (2019), 155, 208 et seq.

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AktG, Zeitschrift für Bank- und Kapitalmarktrecht 2020, p. 1; Kolf/Weishaupt, Mittelständler rufen zum Klimastreik auf, Handelsblatt, 4 September 2019; Losasso/Dellecker, Shareholder activism: Standing up for sustainability?, April 2018, Luc Hoffmann Institute, available at: https://luchoffmanninstitute.org/wp-content/uploads/2018/04/Shareholder-activism-report-.pdf; Luhn, Russia rectifies Paris climate accord – but targets are ‘critically insufficient’, The Telegraph, 23 September 2019, available at: https://www.telegraph.co.uk/news/2019/09/23/russia-ratifies-paris-climate-accord-targets-critically-insufficient/; Marshall, Climate strategy: Get arrested, The New York Times, 10 October 2019 ; Meck, Goldman Sachs-Chef Fink: Klimaschutz ist hochprofitabel, Frankfurter Allgemeine Sonntagszeitung, 2 February 2020; Miller/Smyth, Siemens sparks backlash for refusing to ditch coal mine contract, Financial Times, 12 January 2020, available at: https://www.ft.com/content/0b619eb2-3580-11ea-a6d3-9a26f8c3cba4; MinterEllison/2° Investing Initiative, The Carbon Boomerang: Litigation Risk as a Driver and Consequence of the Energy Transition, September 2017, available at: https://2degrees-investing.org/wp-content/uploads/2017/09/Carbon-boomerang.pdf; Mittal, Politics, not technology, is the biggest obstacle to tackling climate change, Financial Times, 29 May 2019; Mooney, Asset managers join ranks of the agitators, Financial Times, 23 December 2019; Mooney/Naumann, BlackRock rules on best standards for climate risk reporting, Financial Times, 20 January 2020; N/A, EU Commission Chief von der Leyen Stresses Climate Agenda, Deutsche Welle News, 27 December 2019, available at: https://www.dw.com/en/eu-commission-chief-vonder-leyen-stresses-climate-agenda/a-51443196; N/A, German energy giant RWE agrees to halt logging in Hambach Forest, Deutsche Welle News, 20 February 2019, available at: https://www.dw.com/en/germanenergy-giant-rwe-agrees-to-halt-logging-in-hambach-forest/a-47605174; N/A, Shareholders crank up demand for climate change action, BusinessGreen, 26 August 2009, available at: https://www.businessgreen. com/bg/news/1807260/shareholders-crank-demand-climate-change-action; Nauman, Green impact – Growth spurt for issuance of sustainability-linked loans, Financial Times, 27 January 2020; Nordea Markets, Strategy & Quant: Cracking the ESG code, 5 September 2017, available at: https://nordeamarkets.com/wpcontent/uploads/2017/09/Strategy-and-quant_executive-summary_050917.pdf; Novick et al., Towards a Common Language for Sustainable Investing, BlackRock Public Policy Viewpoint, January 2020, available at: https://www.blackrock.com/corporate/literature/whitepaper/viewpoint-towards-a-common-language-forsustainable-investing-january-2020.pdf; Organisation for Economic Co-operation and Development, OECD work in support of climate action, December 2019, available at: http://www.oecd.org/env/cc/OECD-work-insupport-of-climate-action.pdf; Paris Agreement, United Nations, 12 December 2015, available at: http:// unfccc.int/files/essential_background/convention/application/pdf/english_paris_agreement.pdf.; Pitschke/ Rüschen, Family Offices entdecken Impact Investing, die bank 2018, p. 22; PRI, The Inevitable Policy Response: Preparing investors for an abrupt transition, 9 January 2020, available at: https://www.unpri.org/; Rajan, We need to hit the tipping point on pricing climate risk, Financial Times, 23 March 2020; Raval/

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Walker, Investors seek way to hold big oil to Paris goals, Financial Times, 20 May 2019; Right.BasedonSience, #whatif the 30 German stock market’s largest and most liquid companies would reach their current climate targets?, 27 November 2019, available at: https://uploads-ssl.webflow.com/ 5ddbd8f4d31f0fb0ad6f12fd/5de0ee8ed4143433dfd2d13d_right_%23whatif_2019_report.pdf; Rosenbaum, Activists thought BackRock, Vanguard found religion on climate change. Not anymore., CNBC, 13 October 2019, available at: https://www.cnbc.com/2019/10/13/blackrock-vanguard-found-religion-on-climatedoubts-are-growing.html; Sandbu, Lagarde’s green push in monetary policy could be huge step, Financial Times, 2 December 2019, available at: https://www.ft.com/content/89f5f412-12bc-11ea-a225-db2f231cfeae; Schwab, Davos Manifesto 2020: The Universal Purpose of a Company in the Fourth Industrial Revolution, 02 December 2019, available at: https://www.weforum.org/agenda/2019/12/davos-manifesto-2020-the-universal-purpose-of-a-company-in-the-fourth-industrial-revolution/; Sheehan, Letter from JANA Partners & CalSTRS to Apple, Inc., 19 January 2018, available at: https://corpgov.law.harvard.edu/2018/01/19/jointshareholder-letter-to-apple-inc/; Siemens AG, Ordinary annual Shareholders’ Meeting 2020: Voting Results, 5 February 2020, available at: https://assets.new.siemens.com/siemens/assets/api/uuid:8441f2b2-12d4-4fa68f70-90a44bd30b0b/voting-results-siemens-agm2020.pdf; Siemens AG, Shareholder Counterproposals and Election Nominations for the Annual Shareholders’ Meeting 2020 of Siemens AG on February 5, 2020, 22 January 2020, available at: https://assets.new.siemens.com/siemens/assets/api/uuid:1e1d0019-49ac-474c900c-fd26e8ce496e/Gegenantraege-HV2020-de-200122.pdf; Siemens, Shareholder resolutions at the Siemens general assembly 2020 in Munich on 6 February 2020, available at: https://assets.new.siemens.com/siemens/ assets/api/uuid:37448b7d-6b4e-4517-8ee4-513649ab0a99/abstimmergebnisse-siemens-oHV2020.pdf; Skypala, Investors must look hard at the future of plastics, Financial Times, 15 July 2019, available at: https:// www.ft.com/content/0a21d8b6-42af-3b99-b320-c6131b07be86; Tett, The Battles over green investment heat up, Financial Times, 5 December 2019, available at: https://www.ft.com/content/bacefd80-175e-11ea-9ee411f260415385; The Editorial Board, BlackRock needs to deliver on climate pledges, Financial Times, 15 January 2020, available at: https://www.ft.com/content/eff9048e-36e3-11ea-a6d3-9a26f8c3cba4; Thorpe, Investor: Climate Greatest Challenge and Investment Opportunity of Our Age, Forbes, 18 May 2019, available at: https://www.forbes.com/sites/devinthorpe/2019/05/18/investor-climate-greatest-challenge-andinvestment-opportunity-of-our-age/#4f7f81c111 ff; Trillium Asset Management Corporation, Climate Change Shareholder Resolution Wins Majority at Idacorp, 29 May 2009, available at: https://trilliuminvest. com/climate-change-shareholder-resolution-wins-majority-at-idacorp; UBS, Technology and climate change: How big is the investment opportunity, 17 December 2019, available at: https://static1.squarespace.com/ static/5b13b8bf45776ec728800d98/t/5e4e725a50bc066ba3080d78/1582199398740/climate-change-paper_FINAL_digital_17+12+2019.pdf; United Nations Environment Programme Finance Initiative, KENFO is the first sovereign wealth fund to join UN-convened Net-Zero Asset Owner Alliance, 9 March 2020, available at: https://www.unepfi.org/news/themes/climate-change/kenfo-is-the-first-sovereign-wealth-fund-to-joinun-convened-net-zero-asset-owner-alliance/; United Nations Environment Programme Finance Initiative/ International Partnership for Energy Efficiency Cooperation, G20 Energy Efficiency Finance and Investment 2019 stocktake report, October 2019, available at: https://www.unepfi.org/wordpress/wp-content/uploads/ 2019/10/G20-Energy-Efficiency-Finance-and-Investment-2019-Stocktake.pdf; United Nations Environment Programme Finance Initiative/Principes for Responsible Investment, Fiduciary Duty in the 21st Century – Final Report, 2019, available at: https://www.unepfi.org/wordpress/wp-content/uploads/2019/10/Fiduciaryduty-21st-century-final-report.pdf; United Nations Environment Programme, Emissions Gap Report 2019, 26 November 2019, available at: https://www.unenvironment.org/resources/emissions-gap-report-2019; United Nations Environment Programme, Forest or fuel: decision time for Germany, 18 September 2018, available at: https://www.unenvironment.org/news-and-stories/story/forest-or-fuel-decision-time-germany; Vanguard Group, Inc., Vanguard Investment Stewardship: 2019 Annual Report, 2019, available at: https:// about.vanguard.com/investment-stewardship/perspectives-and-commentary/2019_investment_stewardship_ annual_report.pdf; World Economic Forum, The Global Risks Report 2020, 15 January 2020 available at: http://www3.weforum.org/docs/WEF_Global_Risk_Report_2020.pdf; World Economic Forum, The Net Zero Challenge: Fast Forward to Decisive Action, Insight Report in collaboration with Boston Consulting Group, 17 January 2020, available at: http://www3.weforum.org/docs/WEF_The_Net_Zero_Challenge.pdf; Záboji, Die Milliarden-Klimarechnung, Frankfurter Allgemeine Zeitung, 21 January 2020.

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W. Investor-led action for climate and business sustainability

“I firmly believe that wealth means very little in a planet that is dying. I also believe that working together, we can solve the biggest problems facing our society.” Ibrahim AlHusseini, Founder and CEO of FullCycle

Contents I. Introduction ..................................................................................................... II. Climate change arrived in the investment community.......................... III. Why is investors-led action needed? .......................................................... 1. Insufficient political measures ................................................................. 2. Changing regulatory frameworks............................................................ 3. Need for more sustainable investments ................................................ 4. Business dimension of the investor’s-led action for climate ............ IV. Time for investor-led action......................................................................... 1. Invest responsibly ....................................................................................... 2. Divest from non-sustainable businesses................................................ 3. Stay invested and take action................................................................... V. What can investor’s-led action achieve?.................................................... 1. Investor’s dialogue with management ................................................... 2. Corporate decisions and the public arena ............................................ 3. Adopting climate change-related shareholder resolutions................ 4. Insisting on disclosure and climate change reporting ....................... 5. Acting as thought leaders ......................................................................... 6. Taking a seat and action........................................................................... 7. Litigating as last resort .............................................................................. VI. Conclusion........................................................................................................

1 3 7 8 12 16 18 21 23 25 27 30 32 34 39 42 50 56 60 63

I. Introduction Climate change has arrived as a litigation topic in many courtrooms around the globe 1 and as a concern for investors and portfolio managers in the fund and investment community. In a similar way as litigation is being used to tackle climate change, pressure in shareholder meetings and board rooms is increasing. As we are finding ourselves among the global outbreak of the coronavirus pandemie, COVID‐19, we observe how a chain of actions is introduced on a governmental level, as well as a voluntary engagement of corporations and individuals in a worldwide effort to slow down the spread of the pandemic. While COVID‐19 will continue to be at the centre of economic and political considerations for quite some time, the global community may not lose sight of a threat which might not be as perceptible for many yet as COVID‐19, but could have far more devastating consequences – climate change.1 This article explores the important role of investors in fighting climate change. As corporate activities are being scrutinized, generally by citizens and more specifi- 2 cally by climate activists, their opinions and protests also translate into shareholder activities. In order to distinguish sustainability-driven shareholder actions from profitability-focused shareholder activism, we refer to these activities as investor-led action 1 According to the Global Risks Report 2020, produced by the World Economic Forum (‘WEF’) in partnership with Marsh & McLennan and Zurich Insurance Group, 15 January 2020 (‘Global Risks Report 2020’), a long-term risk outlook identifies (i) extreme weather, (ii) climate action failure, (iii) natural disaster, (iv) biodiversity loss, and (v) human-made environmental disasters as top five out of ten risks by likelihood. Climate action failure has been ranked first of top ten long-term risks by impact over the next ten years, surpassing possible impact of weapons of mass destruction. WEF, Global Risks Report 2020, 2 et seq.

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Part 5. Liability for climate damages – Germany as an international pioneer?

for climate. We shall see shareholders increasingly use their legal rights and other means of influence to address issues of social concern and sustainability in the corporate world. This article begins by mapping the context of the climate change-related discourse in the investment community (II.) and explores the main reasons for the investor-led action (III.). After a brief overview of the three principle tools available to shareholders (IV.), we shall explore effective actions which investors can take by seizing the opportunity to facilitate change for building better and more sustainable businesses and tackling climate change (V.).

II. Climate change arrived in the investment community The year 2020 marks the fifth anniversary of the so-called Paris Agreement – the commitment of the world leaders to address the threat of climate change by keeping a global warming well below 2°C by the end of the century.2 However, greenhouse gas emissions continued to rise at a rate of 1.5 % per annum over the past decade.3 As a result, massive action is required in order to reach a reduction of more than 5 % per annum by 2030 to limit the global warming to 1.5‐2°C and reach net-zero carbon emissions by 2050.4 The challenge is daunting. However, it is to tackle the challenge possible by when business, governments, investors and individuals take immediate action at a much greater scale and faster pace.5 4 The grave changes in our environment provide corporations and their shareholders with the opportunity to align values and value creation as they move towards sustainability.6 It took a number of years until the end for sustainability reached the mainstream in the fund and investment industry, but now it seems to have accepted.7 Thus, the year 2020 started off with Larry Fink, the CEO of BlackRock, defining climate risk as investment risk and forecasting a fundamental reshaping of finance: 3

“Climate change has become a defining factor in companies’ long-term prospects. Last September, when millions of people took to the streets to demand action on climate change, many of them emphasized the significant and lasting impact that it will have on economic growth and prosperity – a risk that markets to date have been slower to reflect. But awareness is rapidly changing, and I believe we are on the edge of a fundamental reshaping of finance”.8 2 At the 21st Conference of the Parties (COP 21) in Paris, on 12 December 2015, Parties to the United Nations Framework Convention on Climate Change (UNFCCC) reached a landmark agreement to combat climate change and to accelerate and intensify the actions and investments needed for a sustainable low carbon future. UN, Paris Agreement, 12 December 2015. 3 WEF, The Net Zero Challenge: Fast Forward to Decisive Action, Insight Report in collaboration with Boston Consulting Group (‘WEF/BCG Report’), 17 January 2020, 5 et seq. 4 Supra fn. 3, at 6 et seq. 5 Supra fn. 3, at 29. 6 The WEF has suggested that societies need to turn towards stakeholder capitalism in its Davos Manifesto 2020, cf Schwab, The Davos Manifesto 2020, 2 December 2019. 7 According to a recent study which included interviews with 70 senior executives at 43 global institutional investing firms, including the world’s three biggest asset managers (BlackRock, Vanguard, and State Street) and large asset owners such as the California Public Employees’ Retirement System (CalPERS), the California State Teachers’ Retirement System (CalSTRS), and the government pension funds of Japan, Sweden, and the Netherlands, ESG was almost universally a priority topic. Cf Eccles/ Klimenko, Harv. Bus. Rev., May-June 2019, 106 et seq. 8 Fink, A Fundamental Reshaping of Finance, 14 January 2020; cf also Beaudette, Blackstone CEO urges Action on Climate, WSJ, 23 January 2020, B6; Henderson, BlackRock joins climate action group for funds amid greenwash criticism, FT, 10 January 2020, 21.

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Examples of changing awareness, audacious initiatives and clear signs of progress can 5 indeed be found in many sectors. Climate change has been defined not only as one of the biggest challenges, but also as one of the greatest investment opportunities of our time.9 Climate action can be a source of competitive advantage for companies – it can reduce costs by increasing efficiency, greater responsiveness to the needs of increasingly sustainability-oriented customers and help to retain the best possible talent.10 And yet, a lot of the day-to-day decisions in the corporate and investment world have 6 been dominated by a focus on short-term performance even after more and more studies emphasized climate-related risk as well as related liabilities and opportunities.11 Accordingly, there is much more to be done for the transition towards sustainable companies and towards a sustainable economy: For example, only a small number of companies actually discloses their emissions, and even fewer set emission reduction targets.12

III. Why is investor-led action needed? The term ‘shareholder activism’ is not new. Shareholders have been proactive for a 7 long time, advocating for various topics. This section explores whether an investor-led action for climate is required and can be of added value. We shall first review the scope of political actions related to climate change (1.), turning then to the changing regulatory framework (2.) and the need for additional investments (3.). Finally, we shall also shed some light on the economic implications of aligning an investment portfolio with climate goals (4.).

1. Insufficient political measures From local governments to international organizations, climate change has been 8 acknowledged as an emergency and action is planned or already being undertaken. On 29 November 2019, the European Parliament declared climate emergency and demanded immediate and ambitious action to limit effects of climate change.13 The newly elected President of the European Union Commission, Ursula von der Leyen, declared that dealing with climate change would be a top priority under her leadership.14 To become the world’s first climate-neutral continent by 2050 has been defined by the European Commission (EC) as the greatest challenge and opportunity of our time. To achieve this ambition, the EC presented the European Green Deal – a package of measures that should enable European citizens and businesses to benefit from a sustainable green transition.15 Similarly, the European Central Bank under the new leadership of Christine Lagarde is exploring what a ‘new green deal’ could look like in the monetary policy.16 However, despite some selected positive developments, on the global scale, commitments and policy-making activities of the governments remain dramatically insufficient.17 9 Thorpe, Investor: Climate Greatest Challenge and Investment Opportunity of Our Age, Forbes, 18 May 2019. 10 Supra fn. 3, at 12. 11 Supra fn. 1. 12 Supra fn. 3, at 9; cf also Right.BasedonSience, #whatif. the 30 German stock market’s largest and most liquid companies would reach their current climate targets?, 27 November 2019. 13 EP, The European Parliament Declares Climate Emergency, 20 December 2019. 14 EU Commission Chief von der Leyen Stresses Climate Agenda, DW News, 27 December 2019. 15 EC, The European Green Deal, 11 December 2019. 16 Sandbu, Lagarde’s green push in monetary policy could be huge step, FT, 2 December 2019. 17 Bapna/Brandon/Chan, Adapt Now: A Global Call for Leadership on Climate Resilience, The Global Commission on Adaptation, 13 September 2019, 14.

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The Paris Agreement has been ratified by 189 out of 197 Parties.18 The treaty requires all parties to put forward their best efforts through ‘nationally determined contributions’ and to strengthen these efforts in the years ahead. Despite the daunting consequences, not all governments implemented plans to meet the targets of the Paris Agreement. And for those who did, it is uncertain whether they will be able to meet their goals.19 9 Currently, 120 countries out of 193 member states of the United Nations have a netzero ambition in place.20 At the same time, these countries account in total for less than 25 % of global emissions.21 In addition, the biggest emitters failed or did not introduce sufficient policies to deliver net-zero ambition.22 Thus, for example, while more than 30 countries plan to phase-out coal-fired power plants, China’s proposed coal expansion is far from being aligned with the Paris Agreement and would actually put the necessary reductions in coal power out of reach.23 By terminating the Paris Agreement, the United States have at least distanced themselves from the Paris Agreement and its goals.24 Russia, as the fourth largest greenhouse polluter, has only rectified the Paris Agreement in September 2019 and its pledged targets are so low that it can still increase emissions.25 10 While states and international organizations should be at the forefront of change, a global consensus seems to be unlikely, especially in the rather complex political situation the world is in right now. In this context, individual action of states and corporations becomes even more decisive: “Individual governments and corporations can and should move ahead with unilateral initiatives; it is about realizing savings from efficiency improvements, managing risks, pursuing new opportunities and maintaining a long-term licence to operate. While no single actor can halt global warming alone, efforts by leading industrial nations or large corporations can have a multiplier effect.”26 11

As Lakshmi Mittal, chairman of Arcelor Mittal, pointed out: ‘We are going to have to operate with a mosaic of uneven regional and national approaches and policies for some time to come.’27 As timing is of the essence, investors have their role to play in driving climate change as the global community cannot afford to waiting for politics to align and introducing to appropriate measures. As owners, investors have therefore a special responsibility and at the same time an opportunity to initiate massive action and to help corporations that they have ownership in to seize opportunities, addressing the impending challenges and make their business sustainable. UN, Paris Agreement – Status of the Ratification, 31 March 2020. Cf UN Environment Programme, Emissions Gap Report 2019, 26 November 2019. E.g. Germany committed itself already in 2009 to reduce CO2 emissions in the context of a so-called Effort Sharing Decision (within the EU), but is trailing the goals, cf Záboji, Die Milliarden-Klimarechnung, FAZ, 21 January 2020, 19. 20 UNFCCC, Climate Ambition Alliance: Net Zero 2050, 31 March 2020. 21 Supra fn. 3, at 5 et seq. 22 Ibid., at 8. 23 Ambrose, China’s appetite for coal power returns despite climate pledge, The Guardian, 20 November 2019. In Europe, Poland generates 80 % of its electricity from coal and is not set to meet net zero emissions targets. Cf Dempsey/Khan, Poland defies Brussels by vowing to stick to coal, FT, 2 October 2019. 24 Cheung, What does Trump actually believe on climate change?, BBC, 23 January 2020. 25 Cf Luhn, Russia rectifies Paris climate accord – but targets are ‘critically insufficient’, The Telegraph, 23 September 2019. 26 Supra fn. 3, at 5. 27 Mittal, Politics, not technology, is the biggest obstacle to tackling climate change, FT, 29 May 2019, 9. 18 19

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2. Changing regulatory frameworks Naturally, the climate change-related regulatory framework varies between different countries. Increasing awareness of the climate-change-related risk and consequences will lead to the introduction of new legislation. The Principles for Responsible Investment (‘PRI’) which have to developed as a voluntary and aspirationed set of investment principles may offer some guidance in this regard. According to the initiative, the question is not whether governments are going to react, but rather when and what type of policies they will use.28 To mitigate potential climate-change-related investment risk, investors can increase pressure on corporations and enhance the transition before regulatory changes take place and potential litigation risks materialise.29 The evaluation of recent research and studies further suggests that a new understanding of the concept of fiduciary duties may evolve. Thus, a failure to consider environmental, social and governance (‘ESG’) factors that can affect an investment can amount to a breach of fiduciary duties. The direct translation of this approach into national legislation takes place at a different pace.30 In the meantime, the Fiduciary Duty in the 21st Century Final Report (‘The Fiduciary Duty Report’) which has been launched by the PRI and United Nations Environment Programme Finance Initiative in January 2016 and presented in December 2019, concluded that the fiduciary duties of investors require them to: – ‘Incorporate ESG issues into investment analysis and decision-making processes, consistent with their investment time horizons; – Encourage high standards of ESG performance in the companies or other entities in which they invest; – Understand and incorporate beneficiaries’ and savers’ sustainability-related preferences, regardless of whether these preferences are financially material; – Support the stability and resilience of the financial system; – Report on how they have implemented these commitments.’31 The finding that the fiduciary duties of loyalty and prudence require the incorporation of ESG issues was based on the following key considerations: (i) ESG incorporation as an investment norm, (ii) ESG issues are financially material, and (iii) that policy and regulatory frameworks are changing to require ESG incorporation.32 Following these considerations, investors that fail to incorporate ESG issues are failing their fiduciary duties and are likely to be exposed to litigation risk. More regulatory changes are also to be expected on the European level. After years of multilateral attempts at the OECD- and UN-level to adopt global standards for sustainable finance, the EU took steps to promote sustainable investments on its own 28

PRI, The Inevitable Policy Response: Preparing Investors For An Abrupt Transition, 9 January 2020. Cf supra fn. 3, at 10, indicating that ‘corporations will feel the effects of the global warming when their markets are disrupted or their assets are stranded, whether due to a climat change-related disaster, regulatory changes, public pressure or legal action.’ 30 According to The Fiduciary Duty Report, ‘Globally, there are over 730 hard and soft-law policy revisions, across some 500 policy instruments, that support, encourage or require investors to consider long-term value drivers, including ESG issues. Policy change has clarified that ESG incorporation and active ownership are part of investors’ fiduciary duties to their clients and beneficiaries’, UNEP FI/PRI, Fiduciary Duty Report, December 2019, 8; e.g. Canada: Financial Services Commission of Ontario, Environmental, Social and Governance (ESG) Factors, Investment Guidance Notes, 1 January 2016; UK: Department for Work & Pensions, Clarifying and strengthening trustees’ investment duties, Government response, September 2018; cf also supra fn. 7. 31 Ibid. 32 Ibid. 29

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initiative. In early 2018, for example, the EU Commission announced its Sustainable Finance Action Plan to reorient capital flows towards sustainable investment, to manage financial risks, stemming from climate change and to require transparency from all market participants regarding sustainability.33 The EU will adopt a taxonomy for sustainable finance that will allow for a better selection process, also since asset managers tend to select companies automatically.34

3. Need for more sustainable investments The low-carbon transformation further requires additional investment of at least USD 90 trillion, from now until 2050.35 It is expected that, partially, financing will have to be provided by financial institutions: e.g. over USD 37 trillion to decarbonize, through renewable energy and energy efficiency, the world’s energy system and another USD 18 trillion to make annual required investments of USD 6.3 trillion in manmade infrastructure compatible with a well-below 2°C goal.36 17 The volume that went into sustainable investment shows how large the potential and the challenge will be: Out of USD 280 trillion of global wealth prior to the COVID‐19 pandemic, only about USD 23 trillion were believed to be tied up in sustainable investment.37 Based on a report by the London-based NGO CDP38 and the consulting company Oliver Wyman, European corporates invested EUR 124 billion into climateprotecting manufacturing, related research and development (‘R&D’) and CO2-scarce products.39 At the time of the study, only 12 % of long-term investments were related to climate-protecting technologies. As a result, in order to reach the goals of the EU ‘green deal’ and to reduce emissions by 50 %, about 25 % of long-term investments would need to be made in such climate-protecting technologies.40 To fill this gap is an opportunity and a possibility for investors to accelerate the transition, while carefully assessing which businesses obtain their attention and capital. 16

4. Business dimension of the investor’s-led action for climate 18

Mostly, shareholder activism and climate action specifically are being ‘perceived as cost or a trade-off with other priorities’.41 However, in view of the recent developments as well as evidence that companies with high ESG ratings exhibit market outperformance,42 investor-led action for climate and sustainability can serve multiple causes: it can be an effective tool to address climate change and provide for better risk-adjusted returns on investment. The goals of companies and investors as their owners alike are thereby understood as being aligned – a collaborative action for climate to ensure its sustainability and long-term financial success.43 33

EC, Action Plan On Financing Sustainable Growth, 8 March 2018. Tett, The Battles over green investment heat up, FT, 5 December 2019. 35 UNEP FI/IPEEC, G20 Energy Efficiency Finance and Investment 2019 Stocktake Report, October 2019, 9; IRENA, Global Energy Transformation – A Roadmap to 2050, April 2019, 31. 36 IRENA, NDCs in 2020 – Advancing Renewables in the Power Sector and Beyond, December 2019, 27; OECD, OECD work in support of climate action, December 2019, 2. 37 Ford, Investors can change the narrative on climate transition, FT, 8 December 2019. 38 This NGO was founded in London as the Carbon Disclosure Project in the year 2000. It is running the global disclosure system for companies, investors, cities, states and region. For further information, cf www.cdp.net. 39 Geinitz, Green-Deal: Die Klimavorreiter scheitern am EU-Ziel, FAZ, 25 February 2020. 40 Supra fn. 7. 41 Supra fn. 3, at 5. 42 Behar, Shareholder Action Guide, 2016, 50. 43 Climate Action 100+, 2019 Progress Report, 2 October 2019; cf also Bank of America Merril Lynch, ESG Matters US, 23 September 2019. 34

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A number of recent studies evidence a positive relation between high performance on 19 relevant ESG criteria and superior financial performance. Thus, according to a 2017 study by Nordea Equity Research – the largest financial services group in the Nordic region – in the time period between 2012 and 2015, the difference in performance of companies with the highest ESG ratings compared to those with the lowest ESG ratings amounted to 40 %.44 In addition, better ESG ratings provide business with a competitive advantage and enable them to retain the best talent in the market.45 Thus, investor-led action for climate is required and can yield manifold positive 20 results. Investors could play a decisive role when they select their investments carefully, but also when they actively advocate the transformation of companies towards sustainable business models and long-term profitability.

IV. Time for investor-led action The UN Intergovernmental Panel on Climate Change (‘IPCC’) reports have repeatedly 21 highlighted the urgent need for investors to consider the implications of climate change in an economic context.46 A number of initiatives responded to the call for action. Since 2017, for example, Climate Action 100+, an investment initiative including more than 450 investors and with over USD 40 trillion in assets collectively under management, is engaging with the world’s largest corporate greenhouse gas emitters to curb emissions, improve governance and strengthen climate-related financial disclosures.47 The United Nations-convened Net-Zero Asset Owner Alliance represents over USD 4.6 trillion in assets under management in a united action to align portfolios with a 1.5°C scenario, addressing Article 2.1c of the Paris Agreement.48 Despite such unprecedented and decisive developments, the world community is in urgent need to accelerate joint efforts further on to achieve exponential impact and tackle climate change. In general, investors have three basic options in pursuing unilateral efforts: first, they 22 can decide to invest only in sustainable businesses (1.); second, investors can withdraw capital and divest from companies that do not move towards sustainability (2.); third, they can stay invested and influence the corporate decision-making process (3.).

1. Invest responsibly For those who make new investments, focusing investments on sustainable businesses 23 may be a wise long-term choice.49 There are ample opportunities to invest in themes that counteract further climate change. Such opportunities can foremost arise with regards to new technologies. For example, to mention just a few ways to reduce energy efficiency, the Internet of Things (‘IoT’) facilitates the use of sensors or smart tags to save energy consumption.50 Tech companies suggested that enterprises could more than halve their Supra fn. 7; Nordea Markets, Strategy & Quant – Cracking the ESG Code, 5 September 2017. Supra fn. 3, at 12. E.g. IPCC, Climate Change 2014: Mitigation of Climate Change, 10 et seq.; Babiker et al., in: IPCC, Special Report: Gobal Warming of 1.5°C, 378 et seq. 47 Supra 43, at 13. 48 UNEP FI, KENFO is the First Sovereign Wealth Fund to Join UN-Convened Net-Zero Asset Owner Alliance, 9 March 2020. 49 E.g. 20 leading venture capital firms established the ‘leaders for climate action’ initiative, requiring all new target companies to protect the climate, Acton Capital, Leaders for Climate Action (LFCA): German Venture Capital Firms Introduce Sustainability Clause, 20 January 2020; cf also Pitschke/Rüschen, Family Offices entdecken Impact Investing, die Bank 2018, 22. 50 UBS, Technology and climate change: How big is the investment opportunity, 17 December 2019. 44 45 46

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carbon emissions if they migrated their data storage into a cloud-based storage. New technologies for constructing and refitting buildings could cut emissions significantly. Transportation could be reduced by videoconferencing or telecommuting.51 24 The demand for such investments has rapidly increased.52 For instance, the issuance of sustainability-linked loans increased nearly 250 % year on year in 2019.53 Investment banks recommend their customers to invest in those businesses which actively manage the reduction of emissions in industries, such as real estate, energy or mobility.54 As indicated above, latest research on climate change shows that companies with high ESG ratings may outperform markets.55 Despite multiple indicators that successful ESG engagements yield positive results,56 this understanding still has to be internalised further by the investment community.

2. Divest from non-sustainable businesses Traditional climate activists argue that the only way to dramatically reduce global carbon emissions is to eliminate fossil fuel production and investment into hydrocarbons.57 Some investors, like the Dutch lender Rabobank or the Norwegian insurer Storebrand, started to sell fossil-fuel stocks because of the risk that the companies’ assets would be stranded in a low carbon world.58 More recently, a group of climate activists has established the initiative Stop the Money Pipeline.59 They demand from banks, insurance companies and funds to divest from ‘climate destructors’. In their eyes, these climate destructors go beyond traditional coal, oil and gas companies. If investors act accordingly, the potential effect can be enormous: In December 2019, the investors network Divest Invest stated that, starting in 2012, over 1,100 institutions with more than USD 11 trillion in assets under management have committed to divest from fossil fuels.60 26 The discussion whether it would be appropriate to divest from clients if they did not adopt a sustainable approach is also going on among their advisors in the financial industry.61 For instance, Ralph Hamers, at the time CEO of ING, considered it conceivable to step out of client relationships in polluting industries if they are not open to reducing their carbon footprints. At the same time, the so-called polluters also require financing for a timely transition. For instance, Daniel Klier, head of sustainable finance at HSBC, warned against cutting ties too quickly: 25

‘It doesn’t make sense to just divest them. We need to work with them. None of them are green or brown. They are on a journey.’62

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Ibid. Cf e.g. Bolger, Climate focus drives demand for green bonds, FT, 12 March 2014; Flood, European investors make record allocations to sustainable funds, FT, 3 February 2020. 53 Nauman, Green impact – Growth spurt for issuance of sustainability-linked loans, FT, 27 January 2020, 11. 54 Meck, Goldman Sachs-Chef Fink: Klimaschutz ist hochprofitabel, FAS, 2 February 2020, 19. 55 Supra fn. 42. 56 Harvey/Pearson, Exploring the Impact of Shareholder Activism on Sustainability, May 2018, 20. 57 Raval/Walker, Investors seek way to hold big oil to Paris goals, FT, 20 May 2019, 8. 58 Supra fn. 46. 59 Cf Stop the Money Pipeline initiative available at: https://stopthemoneypipeline.com/. 60 Cadan/Mokgopo/Vondrich, $11 Trillion and Counting, September 2019. 61 Crow/Binham, Banks urged to step up work on climate change, FT, 27 December 2019, 12. 62 Ibid.; also Urs Rohner, Chairman of the Board of Directors of Credit Suisse Group AG defined “mobilizing funds for the transition to a low-carbon and climate resilient world” as one of the three pillars in Credite Suisse’ approach to climate change. Credit Suisse Research Institute, Climate Change: The Energy Transition, January 2020, 3. 52

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In such cases, premature divesting might also yield negative results. Investors might therefore be better placed in taking action and assisting the companies in managing and funding the ongoing energy transition in a reasonable timeframe.

3. Stay invested and take action Many investors argue that engagement is the only way to push companies to be more 27 transparent, set trackable and enforceable targets and to shift their businesses towards greener goals.63 Withdrawing capital from companies may be an easy choice in liquid markets with great returns. However, in less liquid markets, such as private equity and venture capital or in strategic participations, investors may not want to simply divest. If investors want to stay invested, but use their influence to move businesses towards sustainability, they can follow the examples of active shareholders. The phenomenon of ‘shareholder activism’ stands for proactive shareholders, often 28 working towards such goals as higher profitability or a strategy change.64 Activism is about driving change. Shareholders turn to so-called activism when they believe that a company is not maximizing its full potential, for instance, because they believe it would not be growing sufficiently, it would need to reduce costs, or it would require a restructuring. Active shareholders may also argue for the sale of a subsidiary or a company division. They may use their voting rights and the proxy process to change management or the composition of boards. Eventually, they may aim at an M&A transaction or a hostile takeover.65 Shareholder activists have also driven change towards better governance.66 They frequently use public pressure and may liaise with other shareholders. Similarly, investors can play a large role when they actively advocate the transforma- 29 tion of companies towards sustainable business models and addressing climate change. By doing so, they can promote the long-term value of sustainability for business and align the values of corporations, shareholders and society as a whole. Obviously, such investor-led actions also need to pursue clearly defined goals and be constructive. As Catherine Howarth, chief executive of ShareAction, a charity that promotes responsible investing, indicated, eventually it is not about the number of initiatives that have been launched, but about the outcome: “We have to measure ourselves against hard progress towards achieving net zero by 2050. On that measure no bank is anywhere near a climate safe strategy.”67

V. What can investor-led action achieve? Recent developments show an increasing amount of shareholder activism campaigns 30 globally and their visibility as of 2012.68 In view of the urgent need to scale global action for climate, investors could resort to various tools. Some of them might be more and 63

Supra fn. 57. For purposes of an overview (with an emphasis on short sellers) cf Graßl/Nikoleyczik, Shareholder Activism und Investor Activism, AG 2017, 49 et seq.; Losasso/Dellecker, Shareholder Activism: Standing up for sustainability?, April 2018, 8. 65 Supra fn. 42, at 31. 66 Koch, Der Kapitalanleger als Corporate Governance-Akteur im Rahmen der neuen §§ 134 a ff. AktG, BKR 2020, 1 et seq., Fleischer/Strothotte, Ein Stewardship Code für institutionelle Investoren: Wohlverhaltensregeln und Offenlegung der Abstimmungspolitik als Vorbild für Deutschland und Europa?, AG 2011, 221 et seq. 67 Supra fn. 61. 68 There was a decrease in global shareholder campaigns in 2019 (590 global campaigns) as compared to 2018 (676 global campaigns), cf J.P. Morgan, 2019 Proxy Season Review, August 2019, 9. According to 64

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some might be less suitable. Since shareholder action might be time consuming and also distracting for the management of the companies, it is advisable to carefully evaluate the situation and opt for an action which is fit for the specific purpose. Investors might also choose to pursue different actions simultaneously or consecutively. 31 Traditionally, large shareholders, fiduciaries and funds have shared their views in a dialogue with management that took place largely outside the public spotlight (1.). Meanwhile, however, corporate decisions are also discussed widely in the public domain. Active investors address climate-related issues in general assemblies, while media follow how shareholders and management debate on these issues (2.). The public discourse and discussion among shareholders might also be followed by shareholder resolutions (3.). In order to set ambitious and realistic goals for the reduction of emissions, companies and their investors need to build on reliable data and might therefore be well advised to initiate corporate disclosure (4.). In questions of fundamental significance, shareholders may further strive towards progress by acting as thought leaders, e.g. they may choose to write an open letter, as JANA Partners and the California State Teachers Retirement Fund have done it in a matter of significant social concern. Investors may also lead the change in working groups, tackling industry-wide challenges, by working, for instance, on the limitation of the use of non-bio-degradable plastics (5.). Eventually, investors can take a seat on advisory or supervisory boards in order to move corporate strategy towards maximum sustainability (6.). In a chain of investor-led action, litigation and other adjudicatory proceedings would be at the most coercive end, as they would present a way to enforce requests for disclosures, more encompassing reporting acting on resolutions which are not respected by a company (VII.).

1. Investor’s dialogue with management Many investors prefer to share their view on how emissions would need to be curbed or strategies to be shifted in management meetings. As Mark van Baal of the Dutch shareholder group Follow This argues, the ‘softly-softly approach’, where the companies work to find solutions for their business, has its merits, suggesting cajoling rather than bullying the world’s biggest polluters into submission.69 In the past, sustainability and climate change, however, were not at the forefront of such meetings. Rather, from a fund’s perspective, such meetings provided the opportunity to influence the understanding of management with respect to strategy and with regard to the desired financial returns.70 They were also suited to address topics, such as governance and disclosure.71 33 Today, financial power is being used as an instrument to reduce the environmental footprint of companies on all levels, be it in internal meetings or the public arena. The outcomes of such conversations may differ though, even within the same industry, for example Climate Action 100+ has reached different deals with different oil and gas companies.72 While bigger investors are more likely to get management’s attention in such a dialogue, theoretically there are no formal limitations and different investors could consider taking such action. 32

Proxy Review 2020 of As You Sow, already at least 429 shareholder resolutions on ESG issues have been filed for the 2020 proxy season. Cf As You Sow, Proxy Preview 2020, 18 March 2020. 69 Supra fn. 57. 70 Ibid. 71 Rosenbaum, Activists thought BackRock, Vanguard found religion on climate change. Not anymore, CNBC, 13 October 2019. 72 Supra fn. 57.

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2. Corporate decisions and the public arena In the last couple of years, activist groups have staged public protests against corporate decisions. They have addressed their concerns and criticism publicly and took it to shareholder meetings. For instance, in Germany, Bayer AG has faced protests against its acquisition of Monsanto73, the RWE Group in connection with the intended destruction of the Hambach forest among shareholders and in the wider public.74 In January 2020, climate activists and shareholders condemned Siemens AG (‘Siemens’) for its participation in the Adani Group’s coal mining plant project in Australia.75 The Siemens-Adani coal mining plant example demonstrates how the borders between shareholder conversations and public discussions have been blurred. Siemens committed itself to provide the signal technology infrastructure for a railway track that would lead to the Adani Carmichael coal mining plant.76 The contract was signed on 19 December 2019 as a result of a successful tender with a volume of USD 18 million. Once this information became public, it has drawn sharp criticism from supporters of the ‘Fridays for Future’ Movement and other environmentalist groups.77 Then, these protests evolved into a broader public debate and climate campaigners, shareholders and institutional investors voiced their criticism towards management.78 As a result, the Management Board of Siemens even considered dropping out of its contractual obligations, but decided to respect the agreement that it entered into only about three weeks earlier. As Siemens CEO Joe Kaeser explained:

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“Keeping our promises is Siemens’ highest priority. Only being a credible partner, whose word counts also ensures that we can remain an effective partner for a greener future…”79 “Had it been my own company, I may have acted differently …”80 Kaeser also emphasized that Siemens had promised already in 2015 to reduce its emissions by 50 % until 2020 and to be climate neutral in 2030.81 The CEO further announced that Siemens would invest another USD 1 billion until 2025 to reduce the emissions in the company’s supply chain even faster.82 This example will not remain an isolated case. In Germany alone, more than 38 2,500 mid-size companies joined the ‘Entrepreneurs for Future’ group, which is supporting the ‘Fridays for Future’ movement.83 The pressure is meanwhile coming from asset managers, pension funds and management in many areas.84 Activist protests, which 73 Badkar, Bayer shareholders rebuke CEO over Monsanto deal, FT, 26 April 2019; Bayer AG, After Annual Stockholders’ Meeting Votes to not Ratify Board of Management’s Actions: Bayer’s Supervisory Board Unanimously Stands Behind Board of Management, 27 April 2019. 74 UN Environment Programme, Forest or Fuel: Decision Time for Germany, 18 September 2018. Ultimately, deforestation has been temporarily prevented as a result of a court decision and following political pressure, RWE has announced a voluntary halt to deforestation, cf German energy giant RWE agrees to halt logging in Hambach Forest, DW, 20 February 2019. 75 Miller/Smyth, Siemens sparks backlash for refusing to ditch coal mine contract, FT, 12 January 2020. 76 Hegmann, ‘Gegen Lügen und Green washing’ – Siemens im Griff der Klimaaktivisten, DIE WELT, 4 February 2020. 77 Ibid. 78 Supra fn. 75. 79 Cf Kaeser, Joe Kaeser on Adani Carmichael Project, 12 January 2020. 80 Supra fn. 75. 81 Ibid. 82 Ibid. 83 Kolf/Weishaupt, Mittelständler rufen zum Klimastreik auf, Handelsblatt, 4 September 2019, 16. 84 Mooney, Asset managers join ranks of the agitators, FT, 23 December 2019, 7.

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sometimes pursue mass disruption tactics by climbing buildings or trees or shutting down roads and bridges, following the example of such groups as Extinction Rebellion,85 might therefore only serve as a first step in a chain of further actions which could then be initiated by other interest groups, including investors.

3. Adopting climate change shareholder resolutions Another opportunity to engage directly with the company in a collaborative way is to file a shareholder resolution. Depending on the national legislation, this action is available to investors that fulfil certain requirements.86 Empirical data shows that shareholders in the United States have voted on more than 400 resolutions between 2004 and early 2019, asking corporations to report the business risk of climate change and to define strategies to address these risks.87 40 In the US, support for climate change related resolutions increased to an all-time high of 30 % in 2019.88 At the same time, the number of resolutions significantly declined. This decline in resolutions appears to reflect the willingness of companies to work together with shareholder sponsors and to take the requested action.89 For example, BP has agreed to back a Climate Action 100+ shareholder resolution and pledged to disclose how its investment strategy aligns with the Paris climate goals.90 At the same time, Shell has agreed to introduce and to commit itself to emission targets.91 As a result of such commitments, the majority of climate-related resolutions in the proxy season 2018–19 was withdrawn before proxy material was published.92 Trillium Asset Management (‘Trillium’), for instance, filed a resolution at the shareholder meeting of EOG Resources, requesting the company to set and disclose methane reduction goals. After the company committed to such goals and disclosures, Trillium withdrew the resolution.93 More than 10 years ago, Trillium and other investors were also among the pioneers who won a majority of the vote on a resolution that obliged Idaho Power and its CEO LaMont Keen to establish greenhouse gas emissions reduction targets.94 41 In the Siemens example, the management board made far-reaching decisions prior to the general assembly and the shareholders did not file a motion for a more encompassing climate change-related resolution as such. However, some shareholders filed motions aiming at a non-approval (Nichtentlastung) of its CEO pursuant to 39

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Marshall, Climate strategy: Get arrested, NYT, 10 October 2019, 1. E.g. in Germany, according to Section 122 (2) of the German Stock Corporation Act (‘AktG’), shareholders whose combined shares amount to at least one-twentieth of the capital stock or a proportionate ownership of at least EUR 500,000 may request that items be placed on the agenda and be published. Each new item must thereby be accompanied by supporting information and a formal resolution proposal. In addition, according to Sections 126 (1), 127 AktG shareholders may also submit to the Company counterproposals to Managing and/or Supervisory Board relating to specific agenda items and make election nominations for Supervisory Board or independent auditors in advance. This does not affect any shareholder’s right to submit counterproposals or election nominations during the Annual General Meeting. Cf also Keltsch, Aktionärsrechte und Nachhaltigkeit, 353 et seq. For an illustrative example and action advice for the US, please see Behar, The Shareholder Action Guide, 97 et seq. 87 Hale, Shareholder climate engagement at all-time high, Morningstar, 26 September 2019. 88 Ibid. 89 Ibid. 90 Supra fn. 57. 91 Ibid. 92 Supra fn. 87. 93 Ibid. 94 Trillium, Climate Change Shareholder Resolution Wins Majority at Idacorp, 29 May 2009; Shareholders crank up demand for climate change action, BusinessGreen, 26 August 2009; cf also As You Sow history available at: https://www.asyousow.org/about-us#changetheory. 86

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Section 127 AktG.95 Likewise, many investors criticized the Siemens’ Managing Board and, in particular, the CEO Kaeser.96 At the end, the criticism did not convince a majority at the shareholder meeting, as more than 94.29 % of the shareholders voted in favour of the approval of the CEO (Entlastung).97 The decisions that Siemens took prior to the shareholders meeting and the attention to the public debate in the general assembly does, however, illustrate the impact that climate change activism may have.

4. Insisting on disclosure and climate change reporting One of the highly discussed and pursued actions in the context of the investor-led 42 action for climate are requests for disclosure of information and climate change reporting.98 Employing this tool, investors can enhance transparency and support long-term decarbonisation plans.99 In order to reduce the carbon footprint of corporations, there is a need to take stock of their actual share of emissions and other climaterelevant practices. Accordingly, shareholders need companies to provide useful metrics and additional information as to how and when emission reduction goals can be achieved in the transition to a low-carbon economy.100 The Financial Stability Board (‘FSB’), a global organization that is monitoring the 43 development of the financial system, has set up the Task Force on Climate-related Financial Disclosures (‘TCFD’).101 This task force has set up a framework that has received broad global support since its 2017 release: Many institutional companies integrated or plan to integrate aspects of its guidance into their reporting.102 Mark Carney, at the time head of the FSB and governor of the Bank of England (‘BoE’), referred to the TCFD as a ‘public good’ regardless of people’s opinions of climate change.103 While most global banks have signed up to the TCFD, five lenders went beyond their 44 participation in the task force: ING, BBVA, BNP Paribas, Société Génerale and Standard Chartered pledged that they would ‘progressively align’ their corporate loan policies with the goals of the Paris Agreement. Where encompassing reporting standards have not yet been established, shareholders and regulators will need to require disclosures. These disclosures may affect a company’s level of emissions as well as its accounting policies or regulatory outcome.104 Businesses can today also find guidance as to how they could reshape their accounting policies or standards. The International Accounting 95 Cf e.g. Respective motions for non-approval of CEO Joe Kaeser by individual shareholders Dr. Wilhelm Kusterer, Torbjörn Kettel and Isabella Hanni as well as by the umbrella association of critical shareholders (Dachverband der kritischen Aktionärinnen und Aktionäre), cf Siemens, Shareholder Counterproposals and Election Nominations for the Annual Shareholders’ Meeting 2020 of Siemens AG on February 5, 2020, 22 January 2020. 96 Supra fn. 76; Supra fn. 83. 97 Siemens, Ordinary annual Shareholders’ Meeting 2020. Voting Results, 5 February 2020. 98 E.g. in Germany, according to Sections 131 (1) AktG, every shareholder and shareholder representative present at the annual shareholders’ meeting may request information regarding the company’s affairs, legal and business relations. Cf also Keltsch, Aktionärsrechte udn Nachhaltigkeit, 383 et seq. For a comprehensive overview on the power of disclosure in the US see Behar, The Shareholder Action Guide, 238 et seq. 99 Disclosure is one of the key three goals of Climate Action 100+ aiming at providing enhanced corporate disclosures in line with the final recommendations of the Task Force on Climate-related Financial Disclosures (‘TCFD’) and, when applicable, sector-specific Global Investor Coalition on Climate Change (GIC) Investor Expectations on Climate Change guidelines. Climate Action 100+, 2019 Progress Report, September 2019, 13. 100 Supra fn. 87. 101 Ibid. 102 Ibid. 103 Supra fn. 61. 104 Supra fn. 7.

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Standards Board (‘IASB’) has offered guidance on what companies could share with their investors about climate risk.105 45 To the extent that companies would not provide for such disclosures, sanctions by shareholders or regulators may follow. For example, in December 2019, Christopher Hohn outlined plans to punish directors of companies that fail to disclose their CO2 emissions.106 He has been quoted as saying: ‘Investing in a company that doesn’t disclose its pollution is like investing in a company that doesn’t disclose its balance sheet’.107 Going public in the climate debate, Mr Hohn also warned that he would ‘unleash his activist muscle on companies including Airbus and Moody’s if they did not improve their standards of disclosure – and action over climate risks’.108 More specifically, Christopher Hohn criticized BlackRock for failing to impose disclosure requirements in their own investments.109 That is a delicate topic since virtually the whole asset management industry automatically selects companies for their index-driven business. BlackRock rejected Hohn’s attacks, referring to its stewardship team and the engagement of 370 companies on climate change topics.110 Since early 2020, its CEO Larry Fink, in any event, requires all portfolio companies to disclose their emissions in line with industry-specific guidelines, set out by the Sustainability Accounting Standards Board (‘SASB’).111 47 Whereas the investor community may have different views about the level of commitment that corporations should adopt, there seems to be a general agreement that generating information is indispensable for change. For instance, Vanguard makes a clear distinction in its proxy voting guidelines between measures it will consider supporting, covering general disclosures about climate, and measures it will not support – those that require companies to commit to specific business targets, a task it believes must remain with management.112 According to its 2019 Investment Stewardship report, Vanguard consistently advocated for company disclosure that aligns with industryestablished reporting practices such as the TCFD, and state that they have seen increased reporting that is both comparable and decision-useful for investors.113 Furthermore, Vanguard indicates that it engaged with several energy companies that have consistently improved their disclosure on how a low carbon environment may affect their businesses. These companies’ most recent disclosures provide both qualitative and quantitative assessments of their resiliency to numerous climate-change scenarios, including ones in which the goals of the Paris Agreement are met.114 48 Reporting on emissions and setting specific, time-bound goals to meet them, in many cases is significant progress. However, reflecting the external costs would be an 46

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Ibid. Hook/Tett, Hedge fund TCI vows to punish directors over climate change, FT, 1 December 2019. 107 Ibid. 108 Supra fn. 24. 109 Ibid. 110 Ibid.; Cf also The Editorial Board, BlackRock needs to deliver on climate pledges, FT, 14 January 2020, 8. Blackrock also joined Climate Action 100+, cf Novick et al., Towards a Common Language for Sustainable Investing, BlackRock Public Policy Viewpoint, January 2020, 6; Climate Action 100+, 2019 Progress Report, 2 October 2019, 13. 111 Mooney/Naumann, BlackRock rules on best standards for climate risk reporting, FT, 20 January 2020. 112 Vanguard, Vanguard Investment Stewardship 2019 Annual Report, 2019, 21. 113 Ibid., at 22. 114 Ibid., at 22. Ibid., at 22. 106

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even more significant, important step. For example, if the external costs, such as the environmental, health and climate damages, of driving cars would be fully accounted for, the costs would appear to be much higher – and the pressure to compensate for them much stronger.115 The EC has promoted the accounting of external costs for the mobility and transport sector already in a White Paper of 2011, but for many years unfortunately to no avail.116 In the coming years, we shall also see investors and funds pushing for disclosure 49 beyond carbon dioxide emissions. For example, investors have started to challenge various industries for their overuse of plastics and lack of recycling.117 Asset managers have confronted packaging, consumer and chemical companies regarding the production and use of plastic and stepped up support for recycling and utility companies.118 At the current stage, discussions are about strategies to reduce plastics and increase recycling. Accordingly, in a first concerted effort, BMO GAM, the USD 240 billion asset management arm of Bank of Montreal, has engaged with 27 companies on plastic waste.119 BMO asked the companies to reduce the amount of unnecessary single-use plastic, improve the recyclability of plastic and to redesign packaging to reduce waste.120 In a next step, BMO expects the companies ‘to disclose their entire ‘plastic footprint’ in a similar fashion to carbon footprint reports that provide details of greenhouse gas emissions across an entire organisation’.121

5. Acting as thought leaders Investors can further lead the change by serving as thought leaders and working with 50 companies also through coordinated efforts towards common goals. For example, the Plastic Investor Working Group, consisting of 29 global investors and convened by the UN Principles for Responsible Investment, is looking at the risks and opportunities associated with plastics.122 The Ellen MacArthur Foundation has gathered more than 350 signatories since its launch in October 2018 for the New Plastics Economy Global Commitment, including several financial institutions.123 Similarly, rating agencies as well as asset management firms discuss ESG standards and accounting firms debate how to price climate risk.124 Thought leadership and unification is needed to establish common principles. Public initiatives related to environmental or social implications of business may go 51 far beyond management and strategy criticism. They can affect the core of the business itself. For instance, ahead of TUI’s annual shareholders meeting on 11 February 2020, The Association of Ethical Shareholders Germany (Kritische Aktionäre) has criticized TUI, the world’s largest tour operator, for not doing enough to cut its cruise ship emissions and to meet standards set out in the Paris Agreement.125

115

Ebbinghaus, Was ist, wenn der Preis lügt?, FAZ, 30 November 2018, 9. EC, White Paper: Roadmap to a Single European Transport Area Towards a competitive and resource efficient transport system, 2011. 117 Flood, Fund managers go to war on plastic, FT, 18 May 2019; cf also, Skypala, Investors must look hard at the future of plastics, FT, 15 July 2019. 118 Ibid. 119 Ibid. 120 Ibid. 121 Ibid. 122 Ibid. 123 Ibid. 124 Rajan, We need to hit the tipping point on pricing climate risk, FT, 23 March 2020. 125 Hancock, Tui investors threaten to pull out over cruise ship emissions, FT, 11 February 2020. 116

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For more fundamental topics, relying on or submitting well-researched expert opinions, writing open shareholder letters or combining these approaches may be an even more powerful way to influence corporate decision making. In this context, the letter that has been directed at Apple Inc. (‘Apple’) in early 2018 by JANA Partners LLC (‘JANA’) and the California State Teachers’ Retirement System (‘CalSTRS’) may serve as a case in point.126 Both funds collectively owned at the time approximately two billion USD in value in shares in Apple. They believed that there would be a clear need for Apple ‘to offer parents more choices and tools to help them ensure that young consumers use their tools in an optimal manner’.127 In their letter, the two large shareholders praise the company’s achievements and clearly put the finger on the unintentional negative consequences which may affect some of its most frequent young users, covering, for example, distraction as well as depression or suicide risks.128 53 In their joint Shareholder Letter, JANA and CalSTRS demand from Apple that it establishes an expert committee, initiates and gathers research, develops new tools and options, educates parents and monitors the developments.129 Similar steps could be taken by virtually all companies that contribute to climate change. Unless already done, they could undertake steps to explore and evaluate how their offerings can be developed, supplied and used by their customers in a way that will alleviate or avoid any adverse impact on the climate and environment. 54 Six months after the JANA and CALTRS initiative, Apple actually promised that the next version of its operating system iOS would help its customers manage the time they and their children spend on using apps and playing games. Measures would include the option of placing time limits on specific apps. The changes have subsequently been made and the updates have been released with iOS 12 to hundreds of millions of iPhone users in 2018.130 55 One may still discuss whether these changes were appropriate or sufficient to limit the adverse effects of the use of technology. At the same time, there seems to be no doubt that Apple took a major step in the right direction. And the same might be true for many changes which companies could take in terms of improving their products and services in a way that is useful to the customers, the environment and eventually also the company itself. 52

6. Taking a seat and action One of the most powerful tools available to investors is replacing directors and board members with their nominees. According to J.P. Morgan’s 2019 Proxy Season Review, during the 2019 proxy season in the US, 55 % out of 144 campaigns (which were completed by 30 June 2019), resulted in board representation for the activists.131 57 Coming back to the example of the Adani construction project, on 12 January 2020, Siemens’ CEO Kaeser indicated that the Siemens’ Managing Board decided that it would create a new sustainability board to better manage environmental care in the future.132 This new board should consist of external experts and give environmental aspects more priority and attention in the future.133 Kaeser stated that he would open 56

126

For a copy of the letter cf Sheehan, Letter from JANA Partners & CalSTRS to Apple, Inc., 19 January

2018. 127

Bradshaw/Kuchler, New Apple software to help to tackle screen addiction, FT, 4 June 2018. Ibid. 129 Ibid. 130 Supra fn. 127. 131 J.P. Morgan, 2019 Proxy Season Review, August 2019, 8. 132 Supra fn. 75. 133 Ibid. 128

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the doors to the sustainability board to the youth and give them the opportunity to sit at the table. The most remarkable – and possibly most overlooked – aspect of the sustainability board is, however, its power: Based on Kaeser’s explanation, ‘this committee will have the power to stop and escalate projects of critical nature to sustainability, no matter whether we are directly or indirectly participating, like in the current example, with our rail infrastructure.’134 Following media reports, Kaeser tried to calm the protests by speaking directly to 58 representatives of the environmental groups. In this context, he allegedly went as far as to offer the climate change activist Luisa Neubauer a seat on the supervisory board of the Siemens business that would become soon its subsidiary Siemens Energy. Kaeser later denied that he made such an offer.135 In any event, Neubauer indeed reacted quickly indicating that she would not be willing to act on a Siemens board and expose herself to conflicts of interest between her role as Fridays for Future activist and a potential Siemens board responsibility. Irrespective of the Siemens example, taking a seat remains a powerful tool and the so- 59 called sustainability boards may provide for an additional platform for the investors’ action.

7. Litigating as last resort As demonstrated in previous chapters, climate change-related litigation risk exists 60 and both, court litigation and arbitration proceedings, can act as a material driver and a consequence of the climate change-related transitions, e.g. in the energy sector. In the past, the majority of these cases has been brought by environmental activists against states or public authorities. For example, non-governmental-organisations (‘NGOs’), such as Greenpeace or the Association for Environment and Nature Conservation Germany Deutschland (‘BUND’), filed suits to force the German government to implement their own climate change-related emission reduction goals.136 Similarly, actions have been filed against public authorities for a failure to mitigate or restrict emissions in other countries.137 These lawsuits seek governmental action, but they also aim at establishing precedents. 61 While many of these lawsuits have been brought by NGOs, more recently, climate change-related suits have been filed also by other interested parties, including investors. Investors as citizens may, for example, file actions against their own state for a failure to mitigate or restrict emissions.138 Investors may also pursue legal action against corpora134

Ibid. Supra fn. 76. 136 Ibid. 137 On 27 February 2020, in reportedly first judgement worldwide, inter alia, confirming a government’s commitment to Paris Agreement, the UK Court of Appeal (Civil Division) ruled that the UK government acted unlawfully by approving an expansion of Heathrow International Airport without considering the country’s commitment to meeting the Paris Agreement goals. The lawsuit has been filed in August 2018, by Friends of the Earth and Plan B Earth, a British nonprofit with the mission to realize the goals of the Paris Agreement on climate change against the Secretary of State for Transport. The Appeal Judgement can be appealed. For an overview of proceedings-related materials with further references, cf Plan B v Heathrow Expansion at https://planb.earth/plan-b-v-heathrow-expansion/. Cf also Plan B & 11 Citizens v UK. In December 2017, Plan B and and 11 UK citizens commenced proceedings against the UK Government for failing to set a safe climate target for 2050. In January 2018, the Committee on Climate Change recommended a review of the target leading to the introduction of a net zero target for 2050 in June 2019. The Court then declined a full hearing on the case. For full overview of the proceedings with further references, cf https://planb.earth/plan-b-v-uk/. 138 For energy transition-related risk, cf MinterEllison/2° Investing Initiative, The Carbon Boomerang. Litigation Risk as a Driver and Consequence of the Energy Transition, September 2017, 8. 135

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tions or trustees and/or their directors for failure to accurately assess, report or disclose the risks associated with the climate change (including ‘stock drop’ claims).139 In addition, investors may pursue action against professional advisors, for example, accountants, auditors, consultants, funds originators, investment brokers, asset managers or credit ratings agencies, for negligent service provisions in failing to adequately account for climate risk.140 62 However, if investors want to see fast results, arbitration and litigation proceedings may not be their preferred choice as they may typically last for a number of years before they have any effect. This is, of course, different in situations in which temporary relief can be granted or in which a fundamental change can be sought. And even then, it needs to be kept in mind that any judgment does, in principle, only bind the parties to the proceedings. Accordingly, while arbitration or litigation may serve to create precedents, to obtain temporary relief or to enforce decisions which otherwise would not be taken by the company, arbitration or litigation may serve as a viable supportive or an alternative measure.

VI. Conclusion Five years after the adoption of the Paris Agreement, greenhouse gas emissions continue to rise. While business leaders may have acknowledged the need to cut emissions for a long time, climate change has not been at the forefront of corporate and investor attention. More recently, this has changed: Activist shareholders like Christopher Hohn and CEOs like Larry Fink of Blackrock are now pushing corporates to take massive action to account for climate change and to move towards sustainability. In view of the need for immediate action, investor activity will remain crucial in the years to come since the possibilities of governments and international organizations will be limited due to political tensions, debt levels and extensive efforts to keep the economy going. 64 The recent developments raise hope that the global investment community might be entering a new era, when the understanding of “sustainable investing” and of “investing” merge. As part of the last generation that can prevent a global climate failure,141 investors may embrace the opportunity and lead the way by accelerating action individually. The first investor-led steps on the way to a sustainable transition could be: – Talk – Engage into a constructive dialogue with the company’s management or participate in a public discourse; – Ask Questions – File requests for disclosure of information and climate change reporting; – Set the Agenda – Prepare and put shareholder resolutions on the agenda; – Vote – make full use of your shareholder rights; – Take a Seat – take a seat on the management or sustainability boards and in working groups to support long-term plans and transition to successful sustainable business models. 63

139

Supra fn. 138, at 9. Ibid., at 10. 141 Supra fn. 3, at 29. 140

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Liability for climate damages under the Environmental Damage Act Bibliography: Balensiefen, Umweltschadensgesetz Kommentar, 1st ed. 2013; Beckbissinger, Umweltschadensgesetz – Klimaschutz und Verursacherprinzip, EurUP 2020, 2 et seq.; Becker, Das neue Umweltschadensgesetz und das Artikelgesetz zur Umsetzung der Richtlinie über die Umwelthaftung zur Vermeidung und Sanierung von Umweltschäden, NVwZ 2007, 1105 et seq.; Becker, Das neue Umweltschadensgesetz, 2007; Beuck, Voraussetzungen für eine Inanspruchnahme nach dem Umweltschadensgesetz, VersR 2012, 1215 et seq.; Brinktrine, Der Bodenschutz im Umweltschadensgesetz, ZUR 2007, 337 et seq.; Bundesregierung, Deutsche Anpassungsstrategie an den Klimawandel, 2008; Chatzinerantzis/Appel, Haftung für den Klimawandel, NJW 2019, 881 et seq.; Cosack/Enders, Das Umweltschadensgesetz im System des Umweltrechts, DVBl. 2008, 405 et seq.; Deutscher Bundestag, Rechtliche Grundlagen und Möglichkeiten für Klima-Klagen gegen Staat und Unternehmen in Deutschland, WD 7–3000 – 116/16; Diederichsen, Grundfragen zum neuen Umweltschadensgesetz, NJW 2007, 3377 et seq.; Epiney, Umweltrecht der Europäischen Union, 4th ed. 2019; Frank, Klimawandel – auch juristisch eine Blankbox, NVwZ 2018, 960 et seq.; Frank, Störerhaftung für Klimaschäden?, NVwZ 2017, 664 et seq.; Frenz, Bergschadenshaftung für den Klimawandel in Peru?, UTR 2018, 99 et seq.; Fritsch, Das Umweltschadensgesetz und seine Sanierungspflichten – das unterschätzte Haftungsrisiko?, UPR 2011, 365 et seq.; Gassner/Schemel, Umweltschadensgesetz, 3rd ed. 2016; Hager, Die europäische Umwelthaftungsrichtlinie in rechtsvergleichender Sicht, ZEuP 2006, 21 et seq.; IPCC, Summary for Policymakers, in: Global Warming of 1.5ºC: An IPCC special report on the impacts of global warming of 1.5°C above pre-industrial levels and related global greenhouse gas emission pathways, in the context of strengthening the global response to the threat of climate change, sustainable development, and efforts to eradicate poverty, 2018; IPCC, Summary for Policymakers, in: Climate Change 2013: The Physical Science Basis. Working Group I Contribution to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change, 2013; IPCC, Summary for Policymakers, in: Climate Change 2014: Impacts, Adaptation, and Vulnerability. Working Group II Contribution to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change, 2014; Kahl/Daebel, Climate Change Litigation in Germany, EEELR 2019, 67 et seq.; Keich, Die Verantwortlichkeit der Kapitalgesellschaften, ihrer Organe und Arbeitnehmer nach Umweltschadensgesetz im Außenverhältnis, NuR 2012, 672 et seq.; Keich, Die Verantwortlichkeit der Kapitalgesellschaften, ihrer Organe und Arbeitnehmer nach Umweltschadensgesetz im Innenverhältnis, NuR 2012, 737 et seq.; Kling, Die Klimaklage gegen RWE, KJ 2018, 213 et seq.; Knopp, Neues Umweltschadensgesetz, UPR 2007, 414 et seq.; Knopp, EG-Umwelthaftungsrichtlinie und deutsches Umweltschadensgesetz, UPR 2005, 361 et seq.; Koch/Hofmann/Reese (eds.), Handbuch Umweltecht, 5th ed. 2018; Koukakis, Zum Verschuldensmaßstab im Umweltschadensrecht, NuR 2018, 460 et seq.; Landmann/Rohmer (eds.), Umweltrecht Kommentar, 90th ed. 2019; Lau, Der Biodiversitätsschaden – wie gefährlich ist das Umweltschadensrecht wirklich?, ZUR 2009, 589 et seq.; Lisken/Denninger, Handbuch des Polizeirechts, 6th ed. 2018; Ludwig, Die Umsetzung der Umwelthaftungsrichtlinie im Umweltschadensgesetz und im Wasserhaushaltsgesetz, NuR 2007, 401 et seq.; Möstl/Kugelmann (eds.), BeckOK Polizei- und Ordnungsrecht NRW, 12th ed. 2019; Möstl/Mühl (eds.), BeckOK Polizei- und Ordnungsrecht Hessen, 9th ed. 2017; Möstl/Trurnit (eds.), BeckOK Polizeirecht BW, 16th ed. 2019; Petersen, Die Umsetzung der Umwelthaftungsrichtlinie im Umweltschadensgesetz, 2008; Porsch, Endlich angekommen? – Das Umweltschadensgesetz in der Rechtspraxis, in: Kirchhof (ed.), Umwelt und Planung – Anwalt im Dienst von Rechtsstaat und Demokratie, Festschrift für Klaus-Peter Dolde zum 70. Geburtstag, 2014 169 et seq.; Pöttker, Klimahaftungsrecht, 2014; Rehbinder/Schink (eds.), Grundzüge des Umweltrechts, 5th ed. 2018; Ruffert, Verantwortung und Haftung für Umweltschäden, NVwZ 2010, 1177 et seq.; Saurer, Das Verschuldenserfordernis im Umweltschadensgesetz, NuR 2017, 289 et seq.; Saurer/Purnhagen, Klimawandel vor Gericht – Der Rechtsstreit der Nichtregierungsorganisation “Urgenda” gegen die Niederlande und seine Bedeutung für Deutschland, ZUR 2016, 16 et seq.; Scheidler, Umweltschutz durch Umweltverantwortung – Das neue Umweltschadensgesetz, NVwZ 2007, 1113 et seq.; Schenke, Polizei- und Ordnungsrecht, 10th ed. 2018; Schmidt, Verschärfte Umweltverantwortlichkeit von Organmitgliedern – Das neue Umweltschadensgesetz, NZG 2007, 650 et seq.; Schmidt/Schrader/Zschiesche, Die Verbandsklage im Umwelt- und Naturschutzrecht, 2014; Schrader/Hellenbroich, Verbandsklage nach dem Umweltschadensgesetz, ZUR 2007, 289 et seq.; Schwonberg, Anmerkung zu einer Entscheidung des BVerwG, Urteil vom 21.09.2017 (7 C 29/15) – Zu den Maßstäben für Vorsatz und Fahrlässigkeit und der Haftung nach Umweltschadensgesetz: Keine Zurechnung des Gutachterverschuldens, NVwZ 2018, 431 et seq.; Shirvani, Die Wirkung von Genehmi-

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Contents I. Introduction ..................................................................................................... II. The concept of environmental damage ..................................................... 1. Damage to species and natural habitats................................................ 2. Water damage ............................................................................................. 3. Land damage................................................................................................ 4. Restriction of the concept of environmental damage ........................ 5. Climate damages as environmental damages within the meaning of the EDA ................................................................................................... a) Concept of “climate damage”............................................................. b) Possible climate damages in Germany............................................. c) Climate damages and § 2 no. 1 EDA ............................................... III. Responsible party ............................................................................................ 1. Category of persons concerned ............................................................... 2. Direct causation .......................................................................................... a) Causality.................................................................................................. b) Directness................................................................................................ c) Proof of causation ................................................................................. 3. Responsible party for climate damages within the scope of the EDA ............................................................................................................... a) Case Lliuya vs. RWE............................................................................. b) Significance of the case for potential liability under the EDA ... IV. Legal effects ...................................................................................................... 1. Obligations of the responsible party ...................................................... 2. Powers of the authorities .......................................................................... 3. Selection of disturbers ............................................................................... 4. Bearing of costs ........................................................................................... V. Conclusion........................................................................................................

1 4 5 7 9 10 14 15 19 23 29 30 33 36 37 39 41 42 46 50 50 53 55 58 62

I. Introduction In recent years, a global discussion has developed in legal scholarship on the question whether anyone, and if so who, is liable for damage to the climate. As the contributions collected in this volume demonstrate, the possible case constellations are numerous and varied. They range from civil law actions by private persons against companies to constitutional disputes against the state because of insufficient climate protection legislation all the way to potential state liability under EU law or international law1. 2 A starting point that has hardly been considered is the possible liability for climate damage under the German Environmental Damage Act (‘EDA’), or Umweltschadensgesetz (USchadG), of 10 May 2007.2 This is a German federal act, issued to implement the 1

1 An overview of forms of liability that may apply can be found in Kahl/Daebel, EEELR, 2019, 67 et seq.; German Bundestag, WD 7–3000 – 116/16, 2016. 2 Federal Law Gazette I, 666, as last amended by the Act of 4 August 2016, Federal Law Gazette I, 1972. An unofficial English translation is available at https://www.bmu.de/fileadmin/Daten_BMU/Download_PDF/Strategien_Bilanzen_Gesetze/uschadg_en.pdf. For a general introduction into the aims and background of the EDA see Beckbissinger, EurUP 2020, 2 et seq.

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Environmental Liability Directive (‘ELD’)3 of the European Union (‘EU’). It establishes liability under public law for environmental damage. For damage to the environment itself, it determines responsibility according to regulatory principles. The EDA provides as legal effects the responsible party’s obligations of information, threat prevention, remediation, and cost bearing. Only the competent authorities may lawfully enforce these obligations, while environmental organizations can request intervention. This contribution examines to what extent the EDA also establishes a liability for 3 climate damage. First, the present study elucidates the concept of environmental damage in the sense of the EDA and analyses its meaning with regard to climate damage (II.). Then, it pursues the question to what extent, in case of climate damage, there is a responsible party in the meaning of the EDA, which is liable for the damage that has occurred (III.). In this context, the study also discusses problems of proving causality, which are inherent to all climate change litigation cases. Finally, it treats the legal effects standardized in the EDA (IV.). It closes with a critical summary (V.).

II. The concept of environmental damage A central prerequisite for liability under the EDA is the existence of an environmental 4 damage. The EDA protects the environment as such and defines environmental damage as damage to species and natural habitats, water, and land (§ 2 no. 1 a)-c) EDA). The existence of an environmental damage thus depends both on whether one of the named environmental objects of protection is concerned and whether there is a measurable impairment.

1. Damage to species and natural habitats The first object of protection within the scope of the EDA’s environmental concept 5 encompasses species and natural habitats. § 2 no. 1 a) EDA does not itself regulate which species and natural habitats are included but here refers to § 19 Federal Nature Conservation Act, the Bundesnaturschutzgesetz (‘BNatSchG’)4, which in turn, in § 19 para. 2 BNatSchG, refers to the species named in art. 4 para. 2 or Annex I of the Directive on the Conservation of Wild Birds (‘Birds Directive’)5 or Annex II and IV of the Council Directive on the conservation of natural habitats and of flora and fauna (Habitats Directive)6. Pursuant to § 19 para. 3 BNatSchG, natural habitats are the habitats of the species listed in art. 4 para. 2 or Annex I Birds Directive as well as Annex II Habitats Directive, the places of procreation and rest of the species named in Annex IV Habitats Directive, as well as the natural types of habitats that are of Community interest. By employing complicated, multiple references, the EDA thus mandates that terms should be defined in accordance with various European directives. While this corresponds to the ELD’s regulatory technique, the roundabout approach by

3 Directive 2004/35/EC of the European Parliament and of the Council of 21 April 2004 on environmental liability with regard to the prevention and remedying of environmental damage, OJ 2004 L 143/56. 4 Act on Nature Conservation and Landscape Management (Federal Nature Conservation Act – BNatSchG) of 29 July 2009 (Federal Law Gazette I. 2542). 5 Council Directive 79/409/EEC of 2 April 1979 on the conservation of wild birds, OJ 1979 L 103/1; replaced by Directive 2009/147/EC of the European Parliament and of the Council of 30 November 2009 on the conservation of wild birds, OJ 2009 L 20/7. 6 Council Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats and of wild fauna and flora, OJ 1992 L 206/7.

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way of the BNatSchG impedes the application of law and has no added value itself, at least vis-à-vis a direct naming of the relevant directives in the EDA. 6 Under § 2 no. 1 a) EDA together with § 19 para. 1 cl. 1 BNatSchG, injury exists in the case of a damage that has considerable adverse effects on achieving or maintaining the favourable conservation status of the included habitats or species. Pursuant to § 19 para. 5 BNatSchG, the provisions of Annex I ELD must be consulted to evaluate the significance of the effects. Significance must be determined by referring to the starting condition, taking into account various criteria, such as the number of specimens or a species’ reproductive ability. § 19 para. 5 cl. 2 BNatSchG establishes cases in which damage is not considerable as a rule. According to this, and mirroring art. 2 no. 1 a) ELD, certain adverse effects are excepted from the concept of the damage of protected species and natural habitats: those that arise from activities which the responsible authority authorized or permitted in the context of a compatibility assessment under the Habitats Directive, on the basis of the impact mitigation regulation under environmental protection, due to the establishment of a development plan pursuant to § 30 or § 33 BauGB, or due to a special review under species protection law according to § 43 para. 8 BNatSchG or § 62 para. 1 BNatSchG. But apart from this special provision, a responsible party is also liable for environmental damage resulting from an authorized activity (on this in detail below mns 29, 37 et seq.).

2. Water damage § 2 no. 1 b) EDA also does not itself define water damage but refers in this respect to § 90 Federal Water Act, the Wasserhaushaltsgesetz (‘WHG’)7. According to § 90 para. 1 first alternative 1 WHG, surface waters, coastal waters, groundwater, and sea water belong to the recorded waters. 8 In principle8, any damage with considerable adverse effects on the ecological or chemical condition of a surface water or coastal water (§ 90 para. 1 first alternative 1 no. 1 WHG) or on the ecological potential or the chemical condition of an artificial or considerably changed surface water or coastal water (§ 90 para. 1 first alternative 1 no. 2 WHG) constitutes water damage. In addition, there is water damage in the case of a damage with significant adverse effects on the chemical or quantitative condition of the groundwater (§ 90 para. 1 first alternative 1 no. 3 WHG) or the condition of a body of sea water (§ 90 para. 1 first alternative 1 no. 4 WHG). What is problematic is the prerequisite of the significance of adverse effects. For unlike in the case of species and natural habitats, neither the EDA nor the WHG or the ELD define significance for water damages. In order to determine significance, it seems reasonable to refer to the water quality levels of the EU Water Framework Directive (‘WFD’)9.10 After all, with § 2 no. 1 b) EDA in conjunction with § 90 WHG, the legislature wanted to implement art. 2 no. 1 b) i) ELD, which in turn refers to the WFD.11 As a result, it would seem plausible that an effect is significant if the damage entails a downgrading of the water quality to a lower level under the WFD.12 7

Federal Water Act (Wasserhaushaltsgesetz – WHG) of 31 July 2009 (Federal Law Gazette I. 2585). Exceptions apply under § 90 para. 1 2nd alternative WHG. 9 Directive 2000/60/EC of the European Parliament and of the Council of 23 October 2000 establishing a framework for Community action in the field of water policy. 10 Beckmann/Wittmann, in: Landmann/Rohmer (eds.), Umweltrecht Kommentar, 90th ed. 2019, § 2 EDA mn. 19; Knopp, UPR 2007, 414 (417). 11 Bundestag publication 16/3806, 20. 12 Thus also Beckmann/Wittmann, supra (fn. 10), § 2 EDA mn. 19; Ludwig, NuR 2007, 401 (402); Knopp, supra (fn. 10), 417; Fritsch, UPR 2011, 365 (367); more critically Cosack/Enders, DVBl. 2008, 405 (410). 7 8

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3. Land damage Land is also a legally protected good covered by the EDA (§ 2 no. 1 c) EDA). According 9 to the model of the ELD, the EDA restricts the concept of damage for land, when compared to the one concerning species, natural habitats, and water. § 2 no. 1 c) EDA includes a damage to soil through impairment of the soil functions in the sense of § 2 para. 2 of the German Federal Soil Protection Act, the Bundesbodenschutzgesetz (‘BBodSchG’).13 Yet this only applies to the extent that the impairment was caused by a direct or indirect introduction of substances, preparations, organisms or microorganisms onto, into, or below the ground and creates a threat to human health (§ 2 no. 1 c) EDA). The restriction of liability for soil damages to cases in which the individual right of human health is harmed or threatened proves to be an anomaly in the EDA, which otherwise does not refer to individual rights. The level of protection here falls short of the present standard under the BBodSchG. But ultimately, this does not have a detrimental effect on land protection, since pursuant to § 1 EDA, other national rules with stricter requirements in relation to the EDA remain untouched. The BBodSchG’s more comprehensive protection of the soil therefore continues to coexist with the EDA.14

4. Restriction of the concept of environmental damage The EDA provides for liability regardless of the private-law property structures 10 concerning environmental goods.15 Unlike the German private-law Environmental Liability Law (‘UmwHG’)16, for instance, the EDA concerns itself not with damages and other forms of compensation between private parties but with creating responsibilities under public law and the associated obligations to prevent, avoid, and remove threats. The law covers environmental damages as such. It is precisely not an issue of damage to legally protected private rights. The EDA’s public-law character becomes apparent in its decision not to require a “damaged party”. The liability for environmental damages under public law, pursuant to the EDA, is 11 restricted to ecological damages in the area of species and habitats, water, and land. Contrary to the integrative approach across various media of the rest of national and European environmental law,17 the EDA therefore does not achieve complete protection of all environmental media. A liability for adverse effects, such as on the environmental goods of air or forests, is not established unless it is accompanied by damage to one of the protected goods.18 The standard used to determine environmental damage further restricts which pro- 12 tected goods principally fall within the scope of the EDA. For protected species and natural habitats, this standard is primarily ecocentric and in part anthropocentric. The standard for water damages is ecocentric, while for land damage, it is anthropocentric. In the latter case, the presence of a damage depends on the existence of effects on or threats to human health. Compared to the ecocentric standard, the level of protection is lower. Thus, for instance, soil contaminations in uninhabited regions are not covered, because they do not entail health risks for humans. As a result, there are gaps in the protection.19 13

Federal Soil Protection Act of March 17, 1998 (Federal Law Gazette I 502). On the relationship between EDA and BBodSchG, see Brinktrine, ZUR 2007, 337 (345 et seq.). 15 Bundestag publication 16/3806, supra (fn. 11), 40. 16 Environmental Liability Act of 10 December 1990 (Federal Law Gazette I 2634). 17 Thus also Beckmann/Wittmann, supra (fn. 10), § 2 EDA mn. 3. 18 Criticizing the concept of environmental damage at the European level as too narrow, Epiney, Umweltrecht der EU, 4th ed. 2019, chapter 6 mn. 152. 19 On this, see Hager, ZEuP 2006, 21 (22 et seq.). 14

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Thus, the EDA on the whole does not lead to a comprehensive liability under public law for the causation of environmental damages. Rather, first – de lege ferenda – it would require a more comprehensive concept of environmental damage and a more consistent conception within the individual protected interests, involving abandoning the anthropocentric standard, to guarantee a sufficient level of protection for the environment as a whole.

5. Climate damages as environmental damages within the meaning of the EDA 14

Following these general preliminary clarifications, now the question arises whether climate damages represent environmental damages within the meaning of the EDA. Legal scholarship on the EDA has hardly addressed this question to date. At most, scholars point out that the EDA is not an instrument of climate protection law20 and that it does not include damages to “climate” as an environmental good.21 Yet these statements are insufficient and do not consider the diversity of possible constellations of damage that can be traced back to climate change.

a) Concept of “climate damage”. In order to be able to answer the question whether the EDA encompasses climate damages, the concept of climate damage must first be defined. To date, there is no accepted definition in German legal scholarship. But art. 8 para. 1 Paris Agreement (‘PA’) provides a reference point.22 It states that the parties to the agreement recognize how important it is to avoid, reduce to a minimum, and handle losses and damages that are connected to the adverse effects of climate change, including extreme weather events and slowly emerging events. Art. 8 para. 1 PA thus differentiates between “climate changes” on the one hand and “climate damages”, which are connected to the adverse effects of climate changes, on the other hand. But there is no definition of the two concepts in the PA. 16 Therefore, one must refer to the scientific, technical, and socio-economic findings on the effects of climate change. The studies of the Intergovernmental Panel on Climate Change (IPCC) serve as the primary source of knowledge.23 The IPCC has issued several assessment reports, most recently the 5th assessment report “Climate Change 2014” as well as the special report “Global Warming of 1,5°C” in 2018, which present findings on the effects of climate change, among other things. According to these findings, the climate system has already warmed over the past decades. The atmosphere and the ocean have warmed, the masses of snow and ice have diminished, the sea level has risen, and the concentrations of greenhouse gases have increased.24 The IPCC differentiates between “climatic changes” and “effects”. According to the IPCC, “climatic changes” to be expected are in particular the increase of the median temperature in most land or ocean areas, the increase of heat extremes in most populated regions, the 15

20 Thus Cosack/Enders, supra (fn. 12), 408; Ruffert, NVwZ 2010, 1177 (1180); Diederichsen, NJW 2007, 3377. 21 Beckmann/Wittmann, supra (fn. 10), § 2 EDA mn. 3; Paschke, in: Koch/Hofmann/Reese (eds.), Handbuch Umweltecht, 5th ed. 2018, § 17 mn. 79 even holds the opinion that no liability at all can be established for climate change effects under current national law. 22 Paris Agreement, United Nations 2015. 23 The IPCC was established in 1988 by the World Meteorological Organization (WMO) and the United Nations Environment Programme (UNEP), with the task of making the most current and comprehensive scientific, technical, and socio-economic knowledge on climate change available to the global community. 24 IPCC, Summary for Policymakers, 2013, in Climate Change 2013: The Physical Science Basis. Working Group I Contribution to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change, B.

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increase of the frequency, intensity, and amount of heavy precipitation in several regions, the increase in intensity and frequency of droughts and precipitation deficits in some regions, as well as the rise of the sea level.25 “Effects” are defined as the consequences of climate change for human and natural systems.26 First of all, these include the effects on biodiversity. With global warming of around 1.5°C, estimates project that 6 % of insects, 8 % of plants, and 4 % of vertebrates lose more than half of their climatically determined geographic dispersal area worldwide. With a warming of around 2°C, it would even be 18 % of insects, 16 % of plants, and 8 % of vertebrates.27 Many species have changed their geographic dispersal areas, seasonal activities, patterns of migration, population sizes, and interactions between the species. Some species have already gone extinct as a result of climate change.28 A further effect of climate change is ocean acidification. This involves threats to marine biodiversity, fishing, and ecosystems. The dispersal areas of many marine species will shift towards higher latitudes. Coral reefs will drastically diminish. Many ocean and coastal systems could be lost irreversibly.29 Ultimately, climate-induced extreme events lead to changes in ecosystems, interruptions of food production and water supplies, damage to infrastructure and settlements, illnesses and deaths.30 So while the IPCC differentiates between “climatic changes” and “effects”, the PA 17 speaks of “climate changes” and “climate damages”. If one takes what has already been said [mns 15 et seq.] as a basis, the concepts of “climate changes” and “climatic changes” involve the same understanding of the term. Both usages describe changes in the climate, such as for instance the rise of the sea level, regardless of the effects of these changes on nature and human beings. The concepts of “effects” and “climate damages”, which are aimed precisely at the consequences of the changes, are effectively subsequent. In this respect, the IPCC’s concept of effects is broader than the PA’s concept of climate damage, as it encompasses both positive and negative effects of climate change on human and natural systems. By contrast, the PA’s climate damage concept only includes those damages that are associated with the adverse effects of climate changes. The differentiation, inherent in both conceptual pairs, between “changes” and “effects/ 18 damages” is convincing and may also constitute a fruitful tool for developing a definition of climate damage. The same applies to the IPCC definition of effects, which must however be restricted according to the limitation in the PA, so that only the negative effects are included. Thus, by combining both conceptual pairs, climate damage can ultimately be defined as any negative effect of climate changes on human and natural systems. b) Possible climate damages in Germany. Subsequently, the question arises which 19 climate damages are possible in Germany, on the basis of the definition just suggested [mn 18].

25 IPCC, Summary for Policymakers, 2018, in: Global Warming of 1.5°C: An IPCC special report on the impacts of global warming of 1.5°C above pre-industrial levels and related global greenhouse gas emission pathways, in the context of strengthening the global response to the threat of climate change, sustainable development, and efforts to eradicate poverty, B.1, B.2. 26 IPCC, Summary for Policymakers, 2014, in: Climate Change 2014: Impacts, Adaptation, and Vulnerability: Working Group II Contribution to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change, Background Box SPM.2: Terms Central for Understanding the Summary; IPCC, supra (fn. 25), Box SPM.1: Context for the Assessment. 27 IPCC, supra (fn. 25), B.3.1. 28 IPCC, supra (fn. 26), A.1. 29 IPCC, supra (fn. 25), B.4. 30 IPCC, supra (fn. 26), A.1.

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The findings of the IPCC reports are not dispersed enough spatially to enable an evaluation of the climate effects for Germany. The German Environment Agency, the Umweltbundesamt, also assumes as much.31 Yet the federal government has adopted a political framework for climate adaptation32 which, subdivided into 15 fields of action, highlights possible consequences of climate change and courses of action for Germany. The detailed listing of the possible effects discussed there would exceed the framework of this study. Therefore, the present representation limits itself to selected examples from the fields of action “biological diversity”, “water, flood, and coastal protection”, as well as “soil”, which are especially relevant with regard to the EDA’s concept of environmental damage. 20 The perhaps gravest effect in the field of action “biological diversity” is the possible extinction of up to 30 % of current animal and plant species throughout Germany. According to sample calculations, this applies with disproportionate frequency to species that are already rare or endangered today, in particular species on the Red List. Negative effects are expected especially for species of the mountain and coastal regions and for those species that are specialized in waters and wetlands or small-scale special sites.33 21 One effect in the field of action concerning “water, flood, and coastal protection” is the declining oxygen content of bodies of water as a result of the increasing warming of the water and soil temperatures. Moreover, floods can worsen the water quality, for example by redistributing contaminated sediments and flooding industrial facilities and sewage plants or heating oil tanks. Extreme wind and precipitation events may result in more erosions, which can cause pollutants, fertilizers and plant protection products from the most diverse areas to enter the groundwater and surface waters.34 22 In the “soil” field of action, climate changes affect soil forming processes, such as material cycles, humus formation, or carbon sequestration, and erosion processes, thus impacting essential natural soil functions and in part possibly impairing them.35 These climate effects, listed here only in the form of examples, are the negative effects of climate changes on natural systems and thus climate damages in the sense of the proposed definition. c) Climate damages and § 2 no. 1 EDA. Lastly, the question remains to be answered whether climate damages represent environmental damages in the sense of § 2 no. 1 EDA. Climate changes [mn. 17], such as the increase in the frequency of heavy precipitation, already do not constitute climate damages in the sense of the definition worked out here [mn. 18]. Yet even if one would categorize the climate changes as climate damages, they would not fall within the scope of the EDA in any event, since the concept of environmental damage is restricted to damages to species, natural habitats, water, and land. Since climate changes themselves are not within the scope of the EDA, it does not present itself as a direct instrument of climate protection law. 24 However, climate changes that are simultaneously climate damages, as they are understood here, can certainly be environmental damage in the sense of § 2 no. 1 EDA.36 This study shall verify this claim on the basis of the examples listed above [mns 20 et seq.]. 23

31 German Environment Agency, Neue Erkenntnisse aus dem IPCC-Sonderbericht über 1,5°C globale Erwärmung. Dokumentation des UBA-Webinars vom 26. Oktober 2018, 2018, 4.2. 32 Federal government, Deutsche Anpassungsstrategie an den Klimawandel, 2008. 33 Federal government, supra (fn. 32), 3.2.5. 34 Federal government, supra (fn. 32), 3.2.3. 35 Federal government, supra (fn. 32), 3.2.4. 36 In the same direction Beckbissinger, supra (fn. 2), 4.

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Species extinction could be an environmental damage in the sense of § 2 25 no. 1 a) EDA. Since species extinction caused by climate change is expected especially for species that are already rare and endangered today, it seems reasonable that also those species can go extinct which must be especially protected according to the Bird Protection Directive or the Flora and Fauna Directive and are therefore within the scope of the EDA by way of § 19 para. 1 cl. 1, para. 2 Federal Nature Conservation Act (BNatSchG). Since neither the BNatSchG nor the EDA define the “favourable conservation status of [a] species”, whose achievement or maintenance must be significantly impacted, it is possible here to fall back on art. 2 no. 4 a) and b) UH-RL. What is accordingly decisive for a species’ conservation status is the totality of the forms of impact influencing that species and possibly affecting the spread and size of the populations in the long term.37 It is advisable to undertake a multi-level analysis, beginning with the local population and extending to the species’ conservation status in its natural dispersal area.38 This suggests that a protected species’ displacement from its current home as a result of climate change must already be seen as a significant adverse effect and so as damage in the sense of § 19 para. 1 cl. 1 BNatSchG. This holds even more true for the complete extinction of the species, which constitutes environmental damage in the sense of § 2 no. 1 a) EDA. The penetration of pollutants, fertilizer, and plant protection products into ground 26 water and surface water as a result of erosion could be an environmental damage within the meaning of § 2 no. 1 b) EDA. Ground and surface waters belong to the bodies of water protected by the EDA pursuant to § 90 para. 1 WHG. It is questionable whether the penetration of pollutants, fertilizers and plant protection products constitutes a significant adverse effect on the ecological or chemical condition of the surface water in the sense of § 90 para. 1 no. 1 WHG or on the chemical or quantitative condition of the ground water in the sense of § 90 para. 1 no. 3 WHG. At any rate, it is possible to assume significance if the damage results in a downgrading of the water quality to a lower level according to the WFD [mn. 8]. The regulations concerning the quality levels, in particular in Annex V WFD, are extremely complex, and it would exceed the parameters of this study to present them. For the purposes of this contribution, it suffices to emphasize that the WFD has different water quality levels for the pollutant concentration, so that their increase as a physical-chemical quality component can represent a significant adverse effect (Annex V table 1.21 WFD). Thus, an environmental damage within the meaning of § 2 no. 1 b) EDA is conceivable. Ultimately, the changed humus formation and carbon capture and sequestration of 27 the soil could represent an environmental damage within the sense of § 2 no. 1 c) EDA. For this, a soil function within the meaning of § 2 para. 2 BBodSchG would have to be impaired by a “direct or indirect introduction of substances, preparations, organisms, or micro-organisms on, in, or under land”, and the impairment would have to entail a threat to human health (§ 2 no. 1 c) EDA). Within the scope of the soil functions of § 2 para. 2 BBodSchG are, for example, the natural function as the basis of life and a habitat for humans, animals, plants, and ground organisms or as a component of the ecosystem, in particular in its water and nutrient cycles (§ 2 para. 2 no. 1 a), b) BBodSchG). That a changed humus formation and carbon capture and sequestration can impair the natural function of the soil in this way seems at least conceivable. Yet beyond this, substances, preparations, organisms, or microorganisms would certainly 37 OVG Schleswig, judgment from 4.2.2016 – 1 LB 2/13, mn. 66. The Higher Administrative Court of Schleswig affirmed the existence of these conditions in the case of a population reduction around 65 % in a nature reserve, mn. 69. 38 Lau, ZUR 2009, 589 (591).

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have to be introduced and engender threats to human health in order for an environmental damage within the meaning of § 3 no. 1 c) EDA to be present. This is a question of the individual case, but at any rate, it does not seem precluded from the outset. 28 As these examples show, case constellations are thinkable in which climate damages are included in the EDA’s concept of environmental damage. Yet it must also be noted that the possible climate effects are much more diverse than the selection above [mns 19 et seq.] reflects. Thus, only the climate effects of 3 of the 15 fields of action identified by the German Environment Agency can fall within the scope of the concept of environmental damage from the outset. Climate damages from the areas of “human health” or “tourist industry”, for instance, are not included. As a result, liability according to the EDA is already out of the question for a variety of climate damages.

III. Responsible party 29

The “responsible party” is the addressee of obligations regarding information, threat prevention, and remediation as well as the bearer of possible preventive and remedial costs. In addition to the concept of environmental damage, the concept of the responsible party, legally defined in § 2 no. 3 EDA, is thus central for establishing liability.39 Under § 2 no. 3 EDA, a responsible party is any natural or legal person who engages in or controls an occupational activity, including the holder of a permit or authorization for such an activity or the person who registers or notifies such an activity, thereby directly causing environmental damage or the immediate danger of such damage. With this definition, the legislature implemented art. 2 no. 6 ELD and in the process deviated from the concept of the “operator”, without intending this to be a substantive modification in the matter. The reason for replacing the concept of the operator with that of the responsible party was simply to clarify that the regime of the EDA pertains to the area of public-law responsibility within the meaning of police and regulatory law (responsibility under police law). Moreover, this was intended to encompass case law concerning the ability to hold to account, under public law, legal persons of private law as well as private persons who participate in a company.40

1. Category of persons concerned 30

According to § 2 no. 3 EDA, both natural and legal persons can be responsible parties within the meaning of the EDA, insofar as they engage in or control an occupational activity. Therefore, the obligations pursuant to EDA can affect everybody in principle, from the ordinary employee to the managing employee to the board member all the way to the company that is responsible for the actions of its constitutional representatives.41 As a result of restricting liability to cases caused by an occupational activity, only the socalled responsible party (Verhaltensstörer) falls within the EDA’s scope.42 This consti-

39

See Beckbissinger, supra (fn. 2), 5 et seq. Bundestag publication 678/06, 39 et seq.; Balensiefen, Umweltschadensgesetz Kommentar, 1st ed. 2013, § 2 EDA mn. 5. 41 Thus with reference to Bundestag publication 16/3806, supra (fn. 11), 21 also Beckmann/Wittmann, supra (fn. 10), § 2 EDA mns 34 et seq.; Keich, NuR 2012, 672 et seq.; Keich, NuR 2012, 737 et seq.; for a discussion of the EDA’s establishment of stricter environmental responsibility of executive bodies, see Schmidt, NZG 2007, 650 et seq. 42 Prevailing opinion, representatively see Beckmann/Wittmann, supra (fn. 10), § 2 EDA mn. 29; Knopp, supra (fn. 10), 417. 40

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tutes an exception in police and regulatory law, which otherwise includes liability for both conduct and condition.43 § 2 no. 4 EDA defines the concept of occupational activity as “any activity carried out 31 in the course of an economic activity, a business or an undertaking, irrespectively of its private or public, profit or non-profit character.” This does not include activities that take place in a purely private environment. Equally, the mere position as the owner or holder of the actual power over a thing does not establish liability under the EDA. The EDA’s scope of application distinguishes between two different kinds of occupa- 32 tional activity. Under § 3 para. 1 no. 1 EDA, damages and threats caused by one of the occupational activities listed in annex 1 fall within the scope. This includes, for instance, the operation of installations under the IPPC Directive44, waste management operations, or the transport of dangerous or environmentally damaging goods. In these cases, the EDA provides for strict liability. This is justified by the fact that the occupational activities listed in annex I are considered especially dangerous.45 Beyond this, occupational activities other than those listed in Annex I also fall within the purview of § 3 para. 1 no. 2 EDA, but only for direct threats and damages to species and habitats and only if the responsible party has been at fault or negligent.46

2. Direct causation Beyond the requirement of occupational activity, § 2 no. 3 EDA limits liability to 33 cases of direct causation of damage or an imminent threat of damage. An imminent threat exists if it is sufficiently probable that environmental damage will occur in the near future (§ 2 no. 5 EDA). Under § 3 para. 4 EDA, in cases in which the damage or threat was not caused by a 34 clearly delimited pollution, the EDA only applies if it is possible to determine a causal link between the damage and the activities of individual responsible parties. However, this rule does not have its own regulatory content, since the requirement of proving causality already results from § 3 para. 1 EDA and § 2 no. 3 EDA.47 § 3 para. 3 nos 1 and 2 EDA also have purely clarifying character, establishing that the law does not apply to damages and dangers caused by armed conflicts, hostilities, civil wars, or insurrections (no. 1) or by an exceptional, inevitable, and irresistible natural phenomenon (no. 2). In these cases, causation by an occupational activity is already lacking.48 Neither the EDA nor general police and statutory law explicitly define when there is 35 direct causation within the meaning of § 2 no. 3 EDA. The majority supports the On this issue and the following Beckmann/Wittmann, supra (fn. 10), § 2 EDA mn. 29. Directive 2008/1/EC of the European Parliament and of the Council of 15 January 2008 concerning integrated pollution prevention and control, OJ L 24/8. 45 Scheidler, NVwZ 2007, 1113 et seq. 46 The Federal Administrative Court had to deal with the standards for fault and negligence in 2017. It decided that private law standards determine the fault or negligent action of the responsible party under § 3 para. 1 no. 2 EDA but that § 278 BGB is not applied mutatis mutandis, so that there is no imputation of foreign fault. Moreover, it determined that liability under § 3 para. 1 no. 2 EDA does not require unlawful conduct. BVerwG, judgment of 21 September 2017–7 C 29/15; on this issue see Schwonberg, NVwZ 2018, 431 et seq.; Koukakis, NuR 2018, 460 et seq.; critically Saurer, NuR 2017, 289 et seq. 47 The substantive categorization of this rule is disputed. There is consensus that this does not constitute a restriction of the scope of application, contrary to the systematic position and the wording. Some view the rule as a rule of evidence (thus Becker, NVwZ 2007, 1105 (1109)), while others see it as a simple reference to the liability requirement of the proof of causality (thus Beckmann/Wittmann, supra (fn. 10), § 3 EDA mn. 22). 48 Schwendner, in: Sieder/Zeitler/Dahme/Knopp (eds.), Wasserhaushaltsgesetz Kommentar, 53rd ed. 2019, § 3 EDA. 43 44

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“theory of direct causation”, which may apply also with regard to the EDA,49 and which determines that the responsible party for a threat is that person whose behaviour has directly brought about the concrete threat – who, in other words, has transgressed the danger threshold him- or herself.50 36

a) Causality. Thus, first of all a causal link between the occupational activity and the environmental damage needs to exist. According to the prevalent theory of equivalence, an action (here: occupational activity) is causal when its absence cannot be imagined without eliminating the result (here: threat or damage).51 This scientific causality is very broad and includes all causes in the causal chain as equal. In order to be able to justify recourse to the party responsible for the conduct under the principles of police law, the large circle of causal actions must therefore be reduced in a second step to a narrower, legally relevant area.52 This occurs by means of the additional requirement of direct causality.

b) Directness. The criterion of directness serves to select, from among the various behaviours that are causal in principle, those behaviours which justify liability under statutory law when considered from an evaluating perspective.53 According to the legislative reasons, the requirement of directness, for instance, clarifies that authorities, which create a prerequisite for exercising an occupational activity by issuing permits, or communities, which do the same by instituting land-use plans, are not responsible parties in the sense of the EDA. They only contribute to causation indirectly.54 38 Initially, the directly responsible party is the person who provided the most recent cause for crossing the danger threshold.55 The responsibility under police law is always an assessment issue; the temporal sequence of the causal contributions alone cannot be decisive.56 Rather, in determining the directly responsible party, the question must be posed who provided the actual and essential cause for the result. This value judgment makes it possible to determine whether a sufficiently narrow link of effect and liability exists between the threat or damage on the one hand and the person’s conduct on the other hand.57 In principle, it is important to consider the legalization effect of permits as well, so that by means of value judgment, a permit holder is eliminated as a disturber under the general principles of police law.58 The EDA breaks this principle, since § 2 no. 3 EDA explicitly includes the holder of a permit or authorization in the sphere of responsible parties.59 37

39

c) Proof of causation. Pursuant to the legislative reasons, the competent authority must prove causation according to the general principles of police law. The mere 49

Prevailing opinion, representatively see Cosack/Enders, supra (fn. 12), 412. VGH Baden-Württemberg, judgment of 16 August 2018–1 S 625/18; Trurnit, in: Möstl/Trurnit (eds.), BeckOK Polizeirecht BW, 16th ed. 2019, § 6 PolG mn. 12. 51 With further references Beckbissinger, supra (fn. 2), 7 et seq.; Wittreck, in: Möstl/Kugelmann (eds.), BeckOK Polizei- und Ordnungsrecht NRW, 12th ed. 2019, § 4 PolG mn. 6; against the applicability of the theory of equivalence in police law Mühl/Fischer, in: Möstl/Mühl (eds.), BeckOK Polizei- und Ordnungsrecht Hessen, 9th ed. 2017, § 6 HSOG mn. 19. 52 Lisken/Denninger, Handbuch des Polizeirechts, 6th ed. 2018, D. 76; Beuck, VersR 2012, 1215 (1219). 53 Beckmann/Wittmann, supra (fn. 10), § 2 EDA mn. 38. 54 Bundestag publication 16/3806, supra (fn. 11), 21. 55 Mühl/Fischer, supra (fn. 51), § 6 HSOG mn. 21. 56 Schenke, Polizei- und Ordnungsrecht, 10th ed. 2018, § 4 mn. 243. 57 VGH Baden-Württemberg, judgment of 7 October 2014–1 S 1327/13; Trurnit, supra (fn. 50), § 6 PolG mn. 12; Gassner/Schemel, Umweltschadensgesetz, 3rd ed. 2016, 71. 58 VGH Baden-Württemberg, supra (fn. 57). 59 Rehbinder/Schink, Grundzüge des Umweltrechts, 5th ed. 2018, chapter 11 mn. 49; on the effect of licenses in the EDA Shirvani, UPR 2010, 209 et seq.; Diederichsen, supra (fn. 20), 3379. 50

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possibility of being responsible for recognized environmental damage is not sufficient. But since the authorizations of the EDA aim to offer quick and effective threat prevention, it is not necessarily required that the causal chain that gives rise to damage is proven completely and with irrefutable certainty in order for the authorities to intervene. As the federal government’s legislative reasons put it, it is enough – as pursuant to current principles of police law – if weighty reasons emerge from the objectively present circumstances, which justify the conclusion that a causal relationship exists between the conduct of the liable person and the hazardous situation that has occurred.60 Unlike for instance the private-law UmwHG [mn. 10], the public-law EDA does not 40 provide ways of facilitating the burden of proof with respect to the proof of causality. This is because the competent authority can fall back on sovereign powers when clarifying the facts of the case, in contrast to injured private parties.61 When reviewing causation under § 26 para. 1 Administrative Procedures Act (Verwaltungsverfahrensgesetz – VwVfG),62 the authority must therefore use the evidence that it considers necessary at its own discretion. This may also include insights that the authority already gained in the course of a permit or authorization procedure associated with the occupational activity.63

3. Responsible party for climate damages within the scope of the EDA To determine liability for climate damages under the EDA, it is essential to answer 41 the question whether the competent authority is able to prove a direct causation of climate damages or the imminent threat of climate damages.64 a) Case Lliuya vs. RWE. The problem of the causation of climate damages by 42 greenhouse gas emitters was controversially debated in German legal scholarship particularly in reaction to the judgment of the Regional Court (LG) of Essen in the case Lliuya vs. RWE.65, 66 In this case, which the Regional Court of Essen decided in the first instance, a Peruvian farmer brought an action against the large German energy supplier RWE with the aim of obtaining compensation for the measures he had taken to protect his property in Peru. He claims that RWE is proportionally jointly responsible for climate change, corresponding to its share in worldwide CO2 emissions, which is equivalent to 0.47 %. Furthermore, he states that as a result of anthropogenic climate change, a glacier is melting, which leads to an increase in the water volume of the glacial lake near the plaintiff’s residence. This lake is threatening to overflow and damage the plaintiff’s property.67 The Regional Court of Essen rejected the existence of this causal chain as the plaintiff 43 claimed it. The Court stated that the defendant party was neither a but-for cause nor a proximate cause for the impairment of the plaintiff’s property. The defendant’s green60

Bundestag publication 16/3806, supra (fn. 11), 22. See also Beckbissinger, supra (fn. 2), 8. Bundestag publication 16/3806, supra (fn. 11), 22. Administrative Procedures Act (Verwaltungsverfahrensgesetz) of 23 January 2003 (Federal Law Gazette I. 102). 63 Schwendner, supra (fn. 48), § 3 EDA. 64 Differentiated analysis at Beckbissinger, supra (fn. 2), 8 et seq. 65 LG Essen, judgment of 15 December 2016–2 O 285/15; an unofficial English translation is available at http://blogs2.law.columbia.edu/climate-change-litigation/wp-content/uploads/sites/16/non-us-casedocuments/2016/20161215_Case-No.-2-O-28515-Essen-Regional-Court_decision.pdf. 66 Chatzinerantzis/Appel, NJW 2019, 881 et seq.; Frank, NVwZ 2017, 664 et seq.; Kling, KJ 2018, 213 et seq.; Frenz, UTR 2018, 99 et seq.; Saurer/Purnhagen, ZUR 2016, 16 et seq.; Voland, NVwZ 2019, 114 et seq. 67 LG Essen, supra (fn. 65), mns 11 et seq. 61 62

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house gas emissions could be imagined to be absent in face of the multitude of smallscale and large-scale emitters worldwide, without the assumed danger of flooding being averted. These emissions are not so significant that anthropogenic climate change and so the supposed threat of the glacial lake flooding would not exist if one imagined the defendant’s emissions to be absent.68 What is more, the emission contributions of all emitters are indistinguishably mixed. These are referred to as total immissions in the sense of the so-called forest damage judgments of the Bundesgerichtshof, the German Federal Court of Justice, and the Bundesverfassungsgericht, the German Federal Constitutional Court.69 These judgments declare that in case of abundant contributions to causality – especially acting over great spatial distances (so-called geographically remote damages, or Distanzschäden) –, individual damages and impairments cannot be attributed to their responsible parties individually (so-called cumulatively caused damages, or Summationsschäden). In the view of the Regional Court of Essen, this logic also applies in this case. It is no longer possible to identify an even remotely linear causal chain from a certain emission source to a certain damage when countless large-scale and small-scale emitters are releasing greenhouse gases.70 Both but-for causality and proximate causality are lacking. The contribution of individual greenhouse gas emitters to worldwide climate change is so slight that the individual emitter does not increase the possible effects of climate change in a significant way.71 In the Court’s view, the Peruvian farmer’s action was therefore unfounded. 44 Now, the case is pending before the Higher Regional Court of Hamm, as the appellate court. The court has not yet issued a judgment. But the Higher Regional Court of Hamm’s decision72 to take evidence by means of expert reports is remarkable. The hearing of evidence extends in particular to the questions of – whether the emissions released by the defendant go up into the atmosphere and lead to a higher density of greenhouse gases due to physical laws, – whether this results in a rise in global temperature, – whether the glacier melts more quickly as a result as well, – whether this leads to the lake’s water volume increasing so much that there is a serious risk of a negative impact on the plaintiff’s property from flooding, and – whether the defendant’s contribution to causation is measurable and calculable and amounts to 0.47 %.73 45 Unlike the court of lower instance, the Higher Regional Court of Hamm thus considers it possible that there is a causal chain between an individual party’s greenhouse gas emissions and a concrete damage. This is convincing. It is certainly true that climate change, along with its effects for the plaintiff, would occur without the defendant’s emissions as well, so that there is no case of so-called cumulative causality. Yet the plaintiff also does not claim as much. Instead, he bases his argument on the fact that there would be a correspondingly lower risk. He does not demand compensation in full, but only partial compensation in the amount of the percentage of the defendant’s causal contribution to climate change. The principles of the forest damage judgments, which cannot be applied to climate change litigation cases, do not contradict this either. The subject of the forest damage judgments were damages in certain forest areas caused by so68

LG Essen, supra (fn. 65), mn. 42. BGH, judgment of 10 December 1987 – III ZR 220/86; BVerfG, decision of 26 May 1998 – 1 BvR 180/88. 70 LG Essen, supra (fn. 65), mn. 45. 71 LG Essen, supra (fn. 65), mn. 46. 72 OLG Hamm, decision of 30 November 2017–5 U 15/17. 73 OLG Hamm, supra (fn. 72). 69

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called sour rain, as a result of SO2 emissions. The courts considered it an insurmountable difficulty to trace the emissions’ path back to individual emitters. But SO2 emissions and CO2 emissions are not comparable. For SO2 emissions remain at a low altitude in the air and there are blown away in all directions. This is why not every SO2 emitter contributes to the damages caused by sour rain in very specific forest areas with his emissions. This is different for CO2 emissions, since they ascend into the atmosphere entirely, so that in consequence, every CO2 emission contributes to global warming and the resulting damages. Every emitter thus provides a partial cause for climate change and its effects.74 Ultimately, proximate causality cannot be denied by referring to the small share that RWE’s CO2 emissions contribute to global climate change. A causal contribution of 0.47 % worldwide, which the plaintiff claims, would certainly be significant. For these are the emissions of one of Germany’s largest energy suppliers, not the emissions of a private household. Yet the case law75 to which the Regional Court of Essen refers in this matter was developed for the smallest-scale emitters and so does not apply to the present case. Contrary to the Regional Court of Essen’s assumption, a proof of causality may therefore certainly be considered here. Thus, it remains to be seen whether this will succeed before the Higher Regional Court of Hamm.76 b) Significance of the case for potential liability under the EDA. What conclusions 46 may now be drawn from the case “Lliuya vs. RWE” for the evidence of causality of climate damages within the meaning of the EDA? First, it is imperative to consider that different standards apply to causation under private law and under public law (that is, police law). While proximate causation is determinative under private law, police law requires direct causation. What is common to both cases is that causality in the scientific sense is a necessary 47 but not a sufficient condition of liability.77 Yet in police law, joint causation is indisputably sufficient for causality.78 Moreover, in order to enable quick and effective threat prevention, the causal sequence does not have to be proven seamlessly and with irrefutable certainty [mn. 39]. Weighty indications that justify concluding that a causal relationship exists between the occupational activity and the realized threat are enough. Such indications are highly likely to be present in typical climate change litigation cases, in which the claim identifies the CO2 emissions of an emitter as a joint cause of climate change and of damage that results from it. The problem of proving causality thus does not arise in the EDA in the same way as in the private-law case “Lliuya vs. RWE”. The Regional Court of Essen’s statements on proximate causation are not transferable 48 either, since this notion, which restricts causality, does not apply to police law.79 Here, the criterion of directness instead serves as the corrective that restricts causality [mn. 37]. An evaluative perspective surely also allows for considering weighty indications that there is a strong link of effect and liability between the threat or environmental damage on the one hand and the occupational activity on the other hand, at 74 On this chain of reasoning, see Frank, supra (fn. 66), 667 et seq.; Kahl/Daebel, supra (fn. 1), 69; categorizing this as a case of hypothetic causality and examining it in detail Pöttker, Klimahaftungsrecht, 2014, 51 et seq.; also affirming the attributability of climate damages Frank, NVwZ 2018, 960 (962). 75 BGH, judgment of 19 November 1971 – V ZR 100/69. 76 Following the judgment of the OLG Hamm, it would be possible to bring an appeal before the Federal Court of Justice. Thus, it may still take several years before there is a final judgment. 77 Thus for police law Schenke, supra (fn. 56), § 4 mn. 241; Lisken/Denninger, supra (fn. 52), D 75 et seq. 78 Lisken/Denninger, supra (fn. 52), D 75; Trurnit, supra (fn. 50), § 6 PolG mn. 12; VGH BadenWürttemberg, judgment of 19 October 1993–10 S 2045/91; VGH Baden-Württemberg, judgment of 22 February 2005–10 S 1478/03; VGH Kassel, judgment of 25 March 2009–6 A 2130/08 mn. 53. 79 Trurnit, supra (fn. 50), § 6 PolG mn. 12.1; Lisken/Denninger, supra (fn. 52), D mn. 76.

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least in the case of the larger CO2 emitters such as the energy supply companies, so that a value judgment suggests that these emitters have provided an essential cause. 49 Therefore, the requirements of the proof of causality under the EDA are lesser, on the whole, than the requirements of proximate causality in private law. If the Higher Regional Court of Hamm (and then possibly the Federal Court of Justice) affirms the chain of causality from the CO2 emissions all the way to the damages threatening the Peruvian farmer, this should apply even more with regard to the EDA. In other words: the final decision on the Peruvian farmer’s case before the German civil courts will also radiate its effect to police law. For provided that the causality of CO2 emissions is determined for climate change in a civil court, affirmation of a causal link under police law seems all the more probable.

IV. Legal effects 1. Obligations of the responsible party Concerning the obligations of the responsible party, it is necessary to distinguish whether there is only an imminent threat of environmental damage or whether environmental damage has already occurred. If there is an imminent threat of an environmental damage, the responsible party must immediately inform the competent authority of all relevant aspects of the situation (§ 4 EDA). Moreover, the responsible party must promptly take the necessary preventive measures pursuant to § 5 EDA. According to § 2 para. 6 EDA, any measure is a preventive measure that seeks to prevent or minimize environmental damage in the case of an imminent threat of such damage. Which measures are required concretely depends on the individual case.80 Both the obligations of information and of threat prevention exist regardless of authorities’ orders that could potentially be issued under § 7 para. 2 EDA. But they presuppose that the responsible party can recognize or has recognized the threat.81 51 If an environmental damage has already occurred, the information obligation under § 4 EDA also applies regarding this matter, for it extends over the entire time period in which an imminent threat exists or the damage that has occurred has not yet been repaired.82 Beyond this, a remedial obligation exists under § 6 EDA. Under § 6 no. 1 EDA, the responsible party must take the necessary damage control measures. This includes all measures to immediately control, contain, remove, or otherwise manage the relevant contaminants and other damage factors (§ 2 no. 7 EDA). Furthermore, § 6 no. 2 EDA articulates the obligation to take the necessary remedial measures according to § 8 EDA. Every measure that serves to remedy environmental damage in accordance with the special regulations constitutes a remedial measure (§ 2 no. 8 EDA). According to § 8 para. 1 EDA, the obligation is initially restricted to identifying the necessary remedial measures and submitting them to the competent authority for approval. This authority then decides on the nature and extent of the measures to be taken (§ 8 II EDA). The obligation under § 8 para. 1 EDA only exists if the responsible party can recognize or has recognized the environmental damage.83 50

80

Bundestag Bundestag 82 Bundestag 83 Bundestag 81

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The material remedial measures are not derived from the EDA but from the 52 BNatSchG, the WHG, and the BBodSchG. For their part, § 19 para. 4 BNatSchG and § 90 para. 2 WHG both refer to Annex II no. 1 ELD. It provides three kinds of remediations: The ‘primary’ remediation in the sense of Annex II no. 1 a) ELD aims for restoration, by returning the damaged natural resources and/or impaired services to baseline condition. If this is not possible, a ‘complementary’ remediation occurs within the meaning of Annex II no. 1 b) ELD. It is intended to compensate for the fact that primary remediation does not result in full restoration. Its purpose is thus to provide a similar level of natural resources and/or services, including, as appropriate, at an alternative site, as would have been provided if the damaged site had been returned to its baseline condition (Annex II no. 1.1.2. ELD). Ultimately, ‘compensatory’ remediation is any action taken to compensate for interim losses of natural resources and/or services that occur from the date of damage occurring until primary remediation has achieved its full effect (Annex II no. 1 c) ELD). Unlike the BNatSchG and the WHG, the BBodSchG does not refer to Annex II of the ELD. Instead, the relevant remedial measures follow directly from § 2 para. 7 BBodSchG, which does, however, formulate requirements that resemble those in Annex II no. 2 ELD for the most part. Within the scope of the EDA, these obligations also apply to the parties responsible for climate damages. But since these are often geographically remote damages, the independent performance of obligations frequently fails, because the responsible party could not or did not recognize the threat or the damage.

2. Powers of the authorities In the case of an environmental damage or the imminent threat of an environmental 53 damage, the competent authority has two possible courses of action: For one, it can task the responsible party with providing all necessary information as well as taking the necessary preventive, damage control, and remedial measures (§ 7 II EDA). But for another, the authority can also take these measures itself. For remedial measures, this follows from § 8 para. 1 EDA and for preventive measures, from an interpretation that conforms to Union law, since art. 5 para. 3 d) ELD provides as much.84 Pursuant to § 8 para. 2 EDA, the authority decides on the nature and extent of the 54 remedial measures to be taken, in accordance with the special regulations. In this process, it must consider the principle of proportionality.85 When choosing remedial measures, the authority can agree to the responsible party’s suggestions, attach conditions, or make another decision on the basis of the information at its disposal.86 Before making its decision, it must inform the affected parties and recognized associations, pursuant to § 8 para. 4 EDA, and take their responses into account. If the authority does not act ex officio, an affected party or an association that can use legal remedies under § 11 para. 2 EDA can also demand that the authority should take action pursuant to § 10 EDA.87 Consequently, the authority takes action, provided that the facts presented to support the application make the occurrence of environmental damage appear credible.88 84

Scheidler, supra (fn. 45), 1118. Bundestag publication 16/3806, supra (fn. 11), 24. 86 Bundestag publication 16/3806, supra (fn. 11), 25. 87 On the request by recognized associations Schmidt/Schrader/Zschiesche, Die Verbandsklage im Umwelt- und Naturschutzrecht, 2014, 144 et seq., mns 379 et seq.; Schrader/Hellenbroich, ZUR 2007, 289 (290 et seq.). 88 VG Saarlouis, judgment of 12 September 2012–5 K 209/12; on this Porsch, in: Kirchhof (ed.), Umwelt und Planung – Anwalt im Dienst von Rechtsstaat und Demokratie, Festschrift für Klaus-Peter Dolde zum 70. Geburtstag, 2014, 169 (186). 85

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3. Selection of disturbers Typically, there is a wide variety of disturbers in climate change litigation cases. Provided that one assumes the presence of causality, every CO2 emitter is jointly responsible for climate change and also for environmental damages resulting from it. In this respect, the question arises who will be burdened by the competent authority with the obligations of threat prevention and remediation. The EDA grants the authority a discretionary selection.89 The general principles of police law concerning the selection of disturbers apply to exercising this discretion.90 56 The authority’s decision must satisfy the principle of proportionality in particular. The selected responsible party must be suited to implementing the intended measure, and it must be necessary as well as reasonable to choose this party.91 The temporal sequence of the contributions to causation and the degree of causation are irrelevant in this context.92 The idea of the effectiveness of threat prevention constitutes an argument for reasonability. This idea favours selecting that person from among several responsible parties under police law who is able to fight the risk most quickly and effectively.93 The economic performance of the responsible party can be considered as well.94 57 Yet even if applying these criteria, in the case of liability for climate damages, it is likely difficult to discover among the many emitters the one who can best remove the threat or damage. In this context, it makes sense to fall back on the greater CO2 emitters, such as the energy supply companies, and not on private persons. Yet choosing among the greater emitters is likely to cause similar difficulties. Can the greater emitter closest to the source of threat or damage best remove the threat or damage, or can the one who is most capable financially do so, or the one who has already gained the most experience in this area, that is to say, was already called on to do so previously? These uncertainties could entail that the competent authorities avoid selecting disturbers at the level of preventive, damage control, and remedial measures by themselves becoming active or remaining inactive instead of the responsible parties. 55

4. Bearing of costs 58

Pursuant to § 9 para. 1 cl. 1 EDA, the responsible party must in principle bear the costs of preventive, damage control, and remedial measures. This provision complies with the polluter-pays principle on which the EDA’s liability regime is based.95 Apart from that, § 9 para. 1 cl. 2 EDA leaves the implementation of the ELD’s cost regulations to the federal states.96 The federal states are permitted to decide that the responsible party does not have to bear the costs of the remedial measures taken, subject to the provisions of art. 8 sec. 4 ELD. Moreover, art. 8 sec. 4 ELD requires that the operator was not at fault or negligent and that the environmental damage was caused either by an emission or by an event that was expressly authorized by an authorization (art. 8 sec. 4 a) ELD), or by an emission or activity or any manner of using a product in the course of an activity which was not considered likely to cause environmental

89

Thus also Schmidt, supra (fn. 41), 652. Becker, Das neue Umweltschadensgesetz, 2007, 76 mn. 198. 91 Lisken/Denninger, supra (fn. 52), D mns 130 et seq. 92 Becker, supra (fn. 90), 80 mn. 210. 93 Lisken/Denninger, supra (fn. 52), D mn. 131. 94 Becker, supra (fn. 90), 80 mn. 209. 95 Petersen, Die Umsetzung der Umwelthaftungsrichtlinie im Umweltschadensgesetz, 2008, 178. 96 On these Knopp, UPR 2005, 361 (362 et seq.). 90

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damage according to the state of scientific and technical knowledge (art. 8 para. 4 b) ELD). Due to this possible exemption from the obligations to bear costs and the separation 59 between the primary and secondary level, cases are conceivable in which a responsible party has to take preventive and remedial measures without being required to bear costs. The same situation also results if the authority considers the proof of causality established at the primary level, and it then emerges that in fact there was no liability.97 § 9 para. 1 cl. 2 EDA also leaves the regulation of such reimbursement claims to the federal states.98 The same applies with regard to potential reimbursements of the authority that implemented the preventive and remedial measures in place of the responsible party. If there are multiple responsible parties, they are entitled to compensation among one 60 another regardless of whether they have been held to account (§ 9 II 1 EDA). The provision implies that the competent authority can claim the full costs from every responsible party. This harmonizes with the effectiveness principle of Union law (interpretation pursuant to the effet utile).99 Compensation occurs pursuant to § 426 para. 1 cl. 2 German Civil Code, Bürgerliches Gesetzbuch (BGB) and depends on the extent to which the threat or damage was predominantly caused by one or the other part (§ 9 para. 2 cl. 2 EDA). These questions of private law are assigned to the ordinary jurisdiction pursuant to § 9 para. 2 cl. 6 EDA. Should the authorities apply the EDA more frequently in climate change litigation 61 cases in the future, an increase in compensation claims under private law pursuant to § 9 para. 2 cl. 2 EDA, § 426 para. 1 cl. 2 BGB could probably be expected as well. Responsible parties that have been held liable would then have to approach numerous other emitters to receive partial restitution from them. But since the proportional share of causation of even the large German CO2 emitters is very slight compared to CO2 emissions worldwide, and since all emitters would have to be called upon for a complete compensation, the compensation of costs should prove to be practically impossible in reality.

V. Conclusion Climate damages can fall under the scope of the EDA only provided that they are at 62 the same time damages of protected species or natural habitats, water, or land (§ 2 no. 1 EDA). But in principle, such cases are certainly conceivable, so that liability under the EDA is possible, at least for some climate damages. Since the EDA protects particularly those legal interests that are not private-regarding, it can even, in individual cases, fill protection gaps of liability provisions under private law.100 The proof that an occupational activity which falls under the scope of the EDA 63 directly causes a climate damage is facilitated vis-à-vis private law principles by the fact that, as a result of the threat prevention aspect, the authority can already intervene if weighty indications exist which justify the conclusion that there is a causal link between the activity and the threat or damage. In the case of CO2 emissions that cause climate damage, such proof could certainly succeed. This is always a matter of the individual case.

97

Wagner, VersR 2008, 565 (572 et seq.). In favor of an analogus application Beckmann/Wittmann, supra (fn. 10), § 9 EDA mn. 2. 99 Petersen, supra (fn. 95), 204. 100 Ruffert, supra (fn. 20), 1178. 98

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Nevertheless, the EDA’s significance for climate actions must be categorized as slight on the whole. A large part of conceivable climate damages does not fall under the scope of the EDA’s concept of environmental damage. 64 It is also not advisable to expand the concept of environmental damage de lege ferenda. For the EDA is not conceived for the kind of complex causality structures that regularly arise in climate liability cases. While § 9 para. 2 EDA offers cost compensation to responsible parties that have been held to task, it seems impossible to locate all responsible parties. The party that is held to task always risks a cost burden that exceeds its contribution to causation. Moreover, the selection of disturbers is likely to cause the competent authority major problems. In climate liability cases, numerous emitters contribute to the genesis of climate damage or its threat. To choose, from among this multitude of responsible parties, the one that can most effectively remove the threat or damage seems nearly impossible. 65 De lege lata there are currently no signs that the German courts will from now on increasingly have to deal with the question of liability for climate damages under the EDA.

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Y. The role of non-governmental organizations for climate change litigation Bibliography: Balla/Borkenhagen/Günnewig, Der UVP-Bericht nach dem Gesetz über die Umweltverträglichkeitsprüfung, ZUR 2019, 323; Bergmann, Handlexikon der Europäischen Union, 5th ed., Nomos 2015; Berkemann, Der slowakische Braunbär im deutschen Prozessrecht – Eine Analyse von EuGHE 2001 I – 1255, DVBl. 2013, 1137 et seq.; Beyerlin, The Role of NGOs in International Environmental Litigation, ZaöRV 2001, 357 et seq.; Calliess, Rechtsstaat und Umweltstaat, zugleich ein Beitrag zur Grundrechtsdogmatik im Rahmen mehrpoliger Verfassungsrechtsverhältnisse, Mohr Siebeck 2001; Calliess, § 44 Schutzpflichten, in: Merten/Papier, Handbuch der Grundrechte in Deutschland und Europa, Band II: Grundrechte in Deutschland – Allgemeine Lehren I, C.F. Müller 2006; Chatzinerantzis/Appel, Haftung für den Klimawandel, NJW 2019, 881 et seq.; Deutscher Bundestag Wissenschaftlicher Dienst, Ausarbeitung, Rechtliche Grundlagen und Möglichkeiten für Klima-Klagen gegen Staat und Unternehmen in Deutschland, WD 7–3000 – 116/16; Deutscher Bundestag Wissenschaftlicher Dienst, Dokumentation, Übersicht der Akteure im Bereich Umweltpolitik, Umweltschutz, Biotechnologie, WD 8–3000 – 002/18; Dothan, Luring NGOs to International Courts: A Comment on CLR v. Romania, ZaöRV 2015, 635 et seq.; Epiney, Umweltrecht der Europäischen Union, 4th ed., Nomos 2019; Epiney/Diezig/Pirker/Reitemeyer, Aarhus Convention, Nomos 2018; Fischer-Lescano, Natur als Rechtsperson, Konstellationen der Stellvertretung im Recht, ZUR 2018, 205 et seq.; Frank, Aspekte zur Risikobewertung beim Eigentumsschutz gem. § 1004 BGB am Beispiel der Klimaklage eines peruanischen Bauern gegen RWE, ZUR 2019, 518 et seq.; Frank, Klimawandel – (auch) juristisch keine Blackbox, NVwZ 2018, 960 et seq.; Franzius, Baustellen des Umweltrechtsschutzes, DVBl 2018, 410 et seq.; Franzius, Genügt die Novelle des Umwelt-Rechtsbehelfsgesetzes den unionsrechtlichen Vorgaben?, NVwZ 2018, 219 et seq.; Franzius, Klimaschutz im Anthropozän, EurUP 2019, 498 et seq.; Frenz, Klimaschutz und Menschenwürde, UPR 2020, 1 et seq.; Freytag, Klimaklagen gegen die EU und Deutschland, ZUR 2019, 571 et seq.; Führ/Schenten/Schreiber/Schulze/ Schütte/Osigus/Dopfer, Evaluation von Gebrauch und Wirkung der Verbandsklagemöglichkeiten nach dem Umwelt-Rechtsbehelfsgesetz (UmwRG), Umweltbundesamt 2014; Gärditz, Schwerpunktbereich – Einführung in das Klimaschutzrecht, JuS 2008, 324 et seq.; Held, Umfang der Klage- und Rügebefugnis von Individualklägern nach dem Umwelt-Rechtsbehelfsgesetz, DÖV 2019, 121 et seq.; Hornberg/Niekisch/ Calliess/Kemfert/Lucht/Messari-Becker/Rotter, Demokratisch regieren in ökologischen Grenzen – Zur Legitimation von Umweltpolitik, Sachverständigenrat für Umweltfragen 2019; Hornung/Vielwerth, Wie viel Politik verträgt das Gemeinnützigkeitsrecht?, DStR 2019, 1497 et seq.; Kahl/Gärditz, Umweltrecht, 11th ed., C.H. Beck 2019; Klinger, Anmerkung zu EuGH: Klagerecht von Umweltverbänden gegen Verschlechterung des Zustandes von Wasserkörpern, NVwZ 2018, 225 et seq.; Klinger, die AarhusKonvention im Werkzeugkasten des Rechtsanwalts: Universeller Türöffner oder stumpfes Schwert?, EurUP 2019, 51 et seq.; Klinger, Freispruch auf Bewährung: Der Umweltrechtsschutz im Fokus des Völkerrechts, ZUR 2017, 577 et seq.; Kloepfer, Umweltrecht, 4th ed., C.H. Beck 2016; Koch, Klimaschutzrecht, NVwZ 2011, 641 et seq.; Köck, Die Mitwirkung der Zivilgesellschaft am Verwaltungshandeln – eine Bilanz, ZUR 2016, 643 et seq.; Köck/Markus, 30 Jahre “Robbenklage”: Zur Aktualität der Eigenrechte der Natur, ZUR 2018, 193 et seq.; Kohlhepp, Rechtsprechung zum Gemeinnützigkeitsrecht 2017/2018, DStR 2019, 129 et seq.; Lammers/Römling, Das neue Governance-System der Europäischen Energieunion: Anforderungen an Beteiligungs- und Überprüfungsrechte, ZUR 2019, 332 et seq.; Landmann/Rohmer, Umweltrecht, 90th ed., C.H. Beck 2019; Maunz/Dürig, Grundgesetz, 88th ed., C.H. Beck 2019; Pernice-Warnke, Verwaltungsprozessrecht unter Reformdruck, DÖV 2017, 846 et seq.; Ramsauer, Die Dogmatik der subjektiven öffentlichen Rechte, JuS 2012, 769 et seq.; Riedinger, Die Rolle nichtstaatlicher Organisationen bei der Entwicklung und Durchsetzung internationalen Umweltrechts, Duncker & Humblot 2001; Sachs, Grundgesetz, 8th ed., C.H. Beck 2018; Säcker/Rixecker/Oetker/Limperg, Münchener Kommentar zum Bürgerlichen Gesetzbuch, Band 8, 8th ed., C.H. Beck 2020; Sauer, 20 Jahre Umsetzung und Praxis der Aarhus Konvention – Zwischenbilanz des Bundesumweltministeriums, EurUP 2019, 33 et seq.; Saurer, Der Anspruch auf Rechtsetzung und seine prozessuale Durchsetzbarkeit, NVwZ 2000, 601 et seq.; Saurer, Klimaschutz global, europäisch, national – Was ist rechtlich verbindlich?, NVwZ 2017, 1574 et seq.; Saurer, Strukturen gerichtlicher Kontrolle im Klimaschutzrecht – Eine Rechtsvergleichende Analyse, ZUR 2018, 679 et seq.; Schlacke, Aktuelles zum Umwelt-Rechtsbehelfsgesetz, NVwZ 2019, 1392 et seq.; Schlacke, Die Novelle des UmwRG 2017, NVwZ 2017, 905 et seq.; Schlacke/Schrader/Bunge, Aarhus-Handbuch, 2nd ed., Eric Schmidt Verlag 2019; Schmidt/Stracke/Wegener/Zschiesche, Die Umweltverbandsklage in der rechtspolitischen Debatte, Umweltbundesamt 2017; Schröter/Bosselmann, Die Robbenklage im Lichte der

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Contents I. Introduction ..................................................................................................... 1 1. NGO’s as representatives of the environment ..................................... 1 2. NGO’s and climate litigation in practice .............................................. 7 3. Climate litigation in Germany by defendants...................................... 12 a) Horizontal action: Corporations in civil courts ............................. 12 b) Climate actions against the state: Duty to protect ........................ 17 II. NGO independent access to court as exception to the rule – the German standing rules in a nutshell .......................................................... 19 III. Formal role of NGO’s in climate litigation against the state................ 28 1. Standing in project related actions ......................................................... 28 2. Compliance with climate protection targets or other rules of climate law ................................................................................................... 30 a) Standing under the Environmental Appeals Act........................... 30 b) Development of the right of action by associations: influence of the Aarhus Convention ....................................................................... 35 c) What does this mean for monitoring compliance with and enforcing climate law?.......................................................................... 44 aa) The decision of the VG Berlin of 31.10.2019 .......................... 45 bb) Repercussions.................................................................................. 50 d) NGO standing for the judicial review of national climate law... 53 3. Climate litigation against the state: Climate legislation..................... 59 a) Individual claim to the Federal Constitutional Court .................. 60 b) Constitutional complaint by an NGO based on individual rights ........................................................................................................ 63 c) Altruistic constitutional complaint?.................................................. 65 IV. Passive legal status of NGO’s ....................................................................... 69 1. Intervention.................................................................................................. 70 2. Amicus Curiae – “friend of the court” .................................................. 72 V. Perspective climate litigation to enforce climate law.............................. 73 1. Obligations under the EU Governance Regulation ............................ 77 2. The EU Climate Change Regulation...................................................... 83 3. National climate protection law.............................................................. 86 a) Long-term plan according to Art. 15 GO.VO................................ 86 b) Federal Climate Protection Act ......................................................... 88 c) Climate protection and environmental impact assessment......... 97 4. Actions for adjustment and compensation .......................................... 101 VI. Conclusion........................................................................................................ 102

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I. Introduction 1. NGO’s as representatives of the environment “Give endangered jaguar’s legal rights” was a headline that came from Argentina on 1 19 July 2019.1 An environmental group had asked the court to hear the jaguar’s plea for protection as a non-human person2, since less than 20 of these animals are still alive in the Gran Chaco region of the country. The demands of the conservationists are not new. In September 1988, a complaint supported by environmental groups, the so-called seal complaint was heard before the Hamburg Administrative Court3. The subject of the complaint was a permit issued by the Federal Ministry of Transport, which allowed certain companies to discharge waste materials into the high seas or to incinerate waste materials, which led to a decimation of the North Sea seal population due to the introduction of toxins. Both proceedings – with more than 30 years between them – are descriptive of the 2 problematic relationship between man and nature and the underlying core issue of legal protection – who can claim protection of animals and the environment in court?4 The environment itself is rarely afforded legal standing or rights5, but is primarily represented by non-governmental organizations (‘NGOs’) committed to the protection of the environment, animals (animal husbandry) and sustainability (environmental associations). This Chapter focusses on this practice in Germany both today as well as on possible developments in the future. NGOs are local, regional, national or international associations of citizens who 3 pursue the same or similar interests through their membership6. The common characteristic is their independence from governments or state institutions and the lack of any intention to make a profit. NGOs provide for (thematic) channelling, systematization and professionalization of opinions vested in and of civil society as such and are therefore of crucial importance for the democratic state. In the environmental sector in particular, a large number organizations are active in Germany (with varying degrees of regional, state, EU or global focus), cooperate with the state and its administration and are of vital importance for the enforcement of environmental law.7

1 https://www.theguardian.com/environment/2019/jul/19/jaguar-argentina-legal-rights-gran-chaco-endangered. 2 See on the term: Fischer-Lescano, ZUR 2018, 205. 3 Administrative Court Hamburg, decision of 22 September 1988, 7 VG 2499/88, juris. 4 In- depth: Köck/Markus, ZUR 2018, 193; Schröter/Bosselmann, ZUR 2018, 195. 5 There are several examples of this as well, however. The Supreme Court of Columbia has ruled that the Colombian Amazon has its own rights. Corte Suprema de Justicia, STC 4360‐2018, 1101‐22‐03‐000‐ 2018‐00319‐01, dated: 5 April 2018. Links to the judgement and other information can be found here: https://www.dejusticia.org/en/en-fallo-historico-corte-suprema-concede-tutela-de-cambio-climatico-ygeneraciones-futuras/. 6 Definition by Bergmann, in: Bergmann, Handlexikon der Europäischen Union, 5th ed., 2015, Nichtregierungsorganisationen (NRO, Non-governmental organizations, NGO); see also: Definition of the Federal Ministry for the Environment and the Federal Ministry for Economic Cooperation and Development: available at: http://www.bmz.de/de/ministerium/wege/bilaterale_ez/akteure_ez/nros/index.html? follow=adword. 7 See a list of the associations registered by the president of the German Parliament (Bundestag): Deutscher Bundestag Wissenschaftlicher Dienst, Dokumentation, Übersicht der Akteure im Bereich Umweltpolitik, Umweltschutz, Biotechnologie vom 23.01.2018, WD 8–3000 – 002/18; already about the role of NGOs: Riedinger, Die Rolle nichtstaatlicher Organisationen bei der Entwicklung und Durchsetzung internationalen Umweltrechts, Duncker & Humblot, Berlin 2001.

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The broad definition employed above might encompass not only environmental protection organizations, but also business and industrial associations,8 which also influence the development of environmental policy and environmental law.9 Their significance for the field of environmental law10 will not be examined further here, although the role of NGOs as business and industry associations (which can represent very different business sectors and interests) should not be underestimated.11 5 For several decades, the commitment of various NGOs has focused on climate protection, emphasizing the climate crisis and human responsibility in the era of the Anthropocene12. At least since 2015 and the adoption of the Paris Agreement, their main objective is to limit global warming to 1.5°C to well below 2°C and thus while not preventing damage to ecosystems altogether, to keep changes in temperature within the planetary limits.13 At the same time, (more) climate protection has long been supported by the German population at large.14 Yet, the climate system (also) cannot represent itself in court. 6 To achieve and implement climate protection, the focus is primarily on measures and commitments to reduce greenhouse gas emissions (GHG, mostly CO2), as well as on forcing states or companies to adopt climate protection targets, yet increasingly issues of adaptation and legal consequences emerge.15 The following considerations are based on the German (and EU) legal system and case law. For climate litigation in other jurisdictions, some references can be found in the footnotes16. 4

2. NGO’s and climate litigation in practice 7

Aside from public campaigns and lobbying to change the law to achieve climate protection, NGOs increasingly engage in or support climate litigation in the stricter sense17 against states or companies, in which more ambitious climate protection or at least climate adaptation measures are demanded primarily on the basis of property and fundamental rights (human rights). The number of climate cases is increasing worldwide.18 One of the world’s most successful climate cases is the Urgenda Climate Case in the Netherlands, which was taken to court by the NGO Urgenda together with private Kloepfer rightly points this out with examples, cf Kloepfer, Umweltrecht, 4th ed., § 10 mn. 33. Deutscher Bundestag Wissenschaftlicher Dienst (fn. 7). 10 On this: Töller/Böcker, Wirtschaftsverbände in der Umweltpolitik, in: Schroeder/Weßels, Handbuch Arbeitergeber- und Wirtschaftsverbände in Deutschland, 2nd ed., 2017, 363 et seq. 11 Example: In the judgment of the Federal Constitutional Court (BVerfG) on the German withdrawal from nuclear power of 6.12.2016, 1 BvR 2821/11, BVerfGE 143, 246‐396, business associations, among others, also submitted comments on the procedure. 12 See on the term: Franzius, EurUP 2019, 498. 13 Franzius (fn. 12), 499. 14 This is shown not only by current election results in favour of green parties or the success of the Friday for Future Movement, but also by the Federal Environment Agency’s 2016 representative polls: “Umweltbewusstsein in Deutschland 2016, Ergebnisse einer repräsentativen Bevölkerungsumfrage” (Environmental awareness in Germany 2016, results of a representative population survey) available at: https://www.umweltbundesamt.de/publikationen/umweltbewusstsein-in-deutschland-2016. 15 See further on the thematic area of “climate protection law” Koch, NVwZ 2011, 641 (642) with further references and in particular with reference to Gärditz, JuS 2008, 324. 16 E.g. forthcoming: Verheyen/Franke: EU Litigation and Wood/Pratt, US Atmospheric Trust Litigation, in: Doelle, Research Handbook on International, National, and Transnational Responses to Loss & Damage, Edgar Elgar, 2021. 17 See on the use of the term Climate Change Litigation in this book; see also Kahl/Gärditz, Umweltrecht, 11th ed., 2019, § 6 mns 129‐133. 18 See for current climate litigation worldwide Stäsche, EnWZ 2019, 248 (254); critical: Wegener, ZUR 2019, 3. 8 9

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individuals as early as 2015 and led to the commitment of the Dutch government to reduce emissions by 25 % by the end of 2020 in the Supreme Court on 20 December 2019.19 In Germany, too, several climate cases (litigation in the stricter sense) are pending or have already been completed. Worthy of exploration are several constitutional complaints to the Federal Constitutional Court against the new federal climate protection legislation20, the lawsuit filed by the Peruvian farmer Luciano Lliuya against the energy company RWE to achieve protection against the effects of climate change21, as well as the first climate complaint before a German administrative court22 to achieve compliance with the national climate protection target for 2020.23 All of these are taken by or at least supported by NGOs. It should be noted that climate change litigation in the broader sense, i.e. project related disputes (roads, mines, electricity generation permits etc. with the aim to reduce greenhouse gas emissions) have been taken to court by NGOs for years, not only in Germany but all over the world, with varying success. In this chapter, we mainly focus on climate litigation in the stricter sense, i.e. claims or applications aiming at “more” climate protection or protection from the impacts of climate change directly, not by preventing a certain project. Although from an empirical point of view, the supporting role of NGOs in the field of climate complaints can hardly be doubted for litigation in Germany as well as globally24 (since most if not all cases are supported financially or at least with regard to communication and media coverage by NGOs) the formal role of NGOs in litigation is still unclear, especially in view of recent case law25. This might be the reason why climate litigation in Germany has been taken mostly on the basis of individual rights such as property protection or fundamental rights (right to health, life, property etc.), and environmental associations have formally only played a minor role.26 This formal role (standing or not?) is strongly affected by the scope and design of the pertinent procedural standing requirements under German law under the Environmental Appeals Act27, but goes far beyond this, both thematically and perspectively. This chapter aims at exploring the role of NGOs in current and prospective climate litigation, explaining the specific procedural situation in Germany and its position in the See § 16 in this book. Also: https://www.urgenda.nl/en/themas/climate-case/. https://www.bund.net/service/presse/pressemitteilungen/detail/news/verfassungsklage-Wegen-unzureichender-deutscher-klimapolitik/; https://www.zeit.de/gesellschaft/zeitgeschehen/2020-01/klimapaketbundesregierung-klimaschutz-verfassungsbeschwerden-klimapolitik-umweltschutz. 21 Explanatory note: Frank, ZUR 2019, 518. 22 See statistics on enumeration of the Sabin Center for Climate Change Law: http://climatecasechart. com/non-us-jurisdiction/berlin/. 23 Administrative Court Berlin, judgment of 31.10.2019, 10 K 412.18, juris. 24 For an overview of climate change litigation and NGO participation: Setzer/Byrnes, Global trends in climate change litigation: 2019 snapshot, London, Grantham Research Institute on Climate Change and the Environment and Centre for Climate Change Economics and Policy, London School of Economics and Political Science 2019, 4 et seq.: http://www.lse.ac.uk/GranthamInstitute/wp-content/uploads/2019/ 07/GRI_Global-trends-in-climate-change-litigation-2019-snapshot-2.pdf. 25 The role of NGOs in international environmental processes has already been dealt with by Beyerlin, ZaöRV 2001, 357; Riedinger (fn. 7); Dothan, ZaöRV 2015, 635. 26 Saurer, ZUR 2018, 679 (682). 27 Umwelt-Rechtsbehelfsgesetz in the version published on 23.8.2017 (BGBl. (Federal Law Gazette) I 3290), which was amended by Art. 4 of the Act of 17.12.2018 (BGBl. I 2549)” (UmwRG); Führ/Schenten/ Schreiber/Schulze, Evaluation von Gebrauch und Wirkung der Verbandsklagemöglichkeiten nach dem Umwelt-Rechtsbehelfsgesetz (UmwRG), study commissioned by the Federal Environment Agency (UBA), 3.6.2013, available: http://www.umweltbundesamt.de/publikationen/evaluation-von-gebrauch-wirkungder; critical of the judicial control powers of the associations: Spith/Hellermann, NVwZ 2019, 745. 19 20

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context of the application of EU law. The latter is imperative given the elaborate and binding climate law framework provided by the EU today.

3. Climate litigation in Germany by defendants a) Horizontal action: Corporations in civil courts. If climate lawsuits are brought against companies through civil courts, e.g. for claims for damages and liability due to climate damage, the rights of action are based on civil law claims, which in Germany are primarily standardized in the German Civil Code (BGB). In particular, claims for injunctive relief and claim for compensation under §§ 1004, 823 BGB (German Civil Code) may apply in the case of climate claims.28 The basic idea of such a lawsuit would be that property (e.g. a plot of land with a residential building) is endangered or impaired by the consequences of climate change and the respective owner makes relief against a contributor to climate change. This could be a company that a claim for injunctive makes a significant contribution to climate change through significant emissions of greenhouse gases. 13 This reasoning is the basis for the claim of a Peruvian farmer and house owner against the energy company RWE.29 The plaintiff’s home in the Andes is located at the foot of a glacier and is actively threatened by melting glaciers and a potential glacial outburst flood. RWE is asked to bear the partial costs for protection measures (construction or reinforcement of the protective dam) against a flooding, proportion to the greenhouse gases emitted by the company worldwide (approx. 0.47 %). Procedure has entered the evidence phase in the court of appeal after a detailed hearing in November 2017.30 This case is supported by an NGO and an independent foundation, but the claim is taken by the private property holder only. 14 The same claim could be made by an environmental association if it was the owner of a plot of land that is affected or at risk by the impacts of climate change to which a company has contributed (this might be a forest plot, or a building in a threatened location). While the acquisition and management of a property must be compatible with the statutory objectives of an environmental association, in particular also with non-profit status under § 52 of the German Tax Code,31 it is common practice for NGOs in Germany and elsewhere to hold property, for example for nature conversation purposes. 15 An NGO could otherwise not formally be part of the proceedings, since such nuisance-type claims must be asserted by the respective rights holder, i.e. the owner or holder of the property (authority to conduct proceedings, § 51 ZPO). The claims are not transferable, i.e. transferable to an environmental organization.32 An NGO could also normally not invoke standing for another right holder (representative action). According to the jurisprudence of the Federal Court of Justice (BGH), such a litigation status (gewillkürte Prozessstandschaft) is conceivable only under narrow circumstances. As a prerequisite, the NGO would have to present with an economic self-interest in the elimination of the impairment of the property.33 Such an economic self-interest might not generally be assumed in the case of an environmental association. 12

28 In-depth: Deutscher Bundestags Wissenschaftlicher Dienst, Ausarbeitung, Rechtliche Grundlagen und Möglichkeiten für Klima-Klagen gegen Staat und Unternehmen in Deutschland, 03.08.2016, WD 7 – 3000 – 116/16, 8. 29 In depth: Chatzinerantzis/Appel, NJW 2019, 881; Frank (fn. 21); Frank, NVwZ 2018, 960. 30 Higher Regional Court (OLG) Hamm, decision of 30.11.2017, I-5 U 15/17, ZUR 2018, 118. 31 On the non-profit status: Kohlhepp, DStR 2019, 129; on the current Attac judgement of the Federal Finance Court from 10.01.2019, V R 60/17: Hornung/Vielwerth, DStR 2019, 1497. 32 Raff, in: Münchener Kommentar zum BGB, 8th ed., 2020, § 1004 mn. 318. 33 Federal Court of Justice (BGH), ruling of 10.6.2016, V ZR 125/15, NJW 2017, 486.

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This restriction of NGOs taking over formal positions in court for affected persons might be different if and as soon as damage occurs and thus tort-like provisions are invoked.34 This is currently the case in the Netherlands where several NGOs invoke a simple tort provision against Royal Dutch Shell asking for a remedy which is akin to a business transformation towards climate neutrality.35 Other approaches to legal action in this area to achieve more climate protection by 16 companies might be based on (internal) corporate responsibility, i.e. shareholder actions. Such cases have not been brought in Germany yet,36 but seem to be generally possible b) Climate actions against the state: Duty to protect. The majority of climate 17 related litigation is not directed against private actors, but against the state37 with the aim of achieving more ambitious climate protection on the basis of legal and factual evidence on climate change and its consequences38. In Germany, judicial review of acts or omissions of the executive takes place before the administrative courts, unless the request for legal protection explicitly refers to legislative acts or omission (i.e. the defendant would be the legislative).39 The focus in the following sections is therefore on environmental NGOs that are 18 prepared to play an independent role in climate lawsuits in order to strengthen and enforce climate protection (law) vis-à-vis the state. Their role is initially determined by whether they can act as independent actors in court, i.e. whether they can be party to a legal dispute. Therefore, the following sections focus on the procedural position in a legal procedure.40 The focus in the following we therefore explain German standing rules in general and the possibilities of action for NGOs (II), move on to the formal active status of NGO in climate litigation (III) and then their passive role as interveners41 or amicus curiae42 (IV). We explore the perspectives for action in the area of climate complaints in section (V), before getting to some conclusions (VI).

II. NGO independent access to court as exception to the rule – the German standing rules in a nutshell At the outset it must be noted that NGO representative actions are an exception to 19 the rule in Germany. The German system provides legal protection only if the person bringing the action is entitled to a “subjective” or personal right. This applies both to civil law, in which individual claims under private law must be asserted and fully proven, and to legal action against public authorities, in which legal protection hinges 34 This is due to the differentiation in German civil law between dingliche Rechte, i.e. rights in rem, and Schuldrecht rights of obligations, which can be transferred freely. 35 No official court information is available on this case. 36 The most recent example is the case brought by the NGO ClientEarth in Poland over the Ostroleka Coal Plant investment: Client Earth v. Enea, for more information see https://www.documents.clientearth. org/wp-content/uploads/library/2018-09-20-clientearth-briefing-ostroleka-c-energa-and-enea-boardmembers-fiduciary-duties-to-the-companies-and-shareholders-ce-en.pdf. Such cases are quite common in the USA. 37 About 80 % of the cases according to: Setzer/Byrnes (fn. 24). 38 United Nations Environment Programme, Climate change in court – a global overview, May 2017, 10, available at https://wedocs.unep.org/bitstream/handle/20.500.11822/20767/climate-change-litigation. pdf?sequence=1&isAllowed=y. 39 See on the discussion on the legal process: Saurer, NVwZ 2000, 601. 40 so: Beyerlin (fn. 25), 357. 41 § 65 of the Administrative Court Rules (VwGO). 42 Latin term, translated: Friend of the Court/Friend of the Court.

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on the existence of a norm of public norm affording subjective rights (Schutznorm). This principle is enshrined in the Basic Law or constitution (Grundgesetz, GG). Art. 19 (4) GG provides the guarantee of legal remedies against public authorities only in the case of violation of one’s own rights. There is no general right of execution or upholding of the law; popular- or representative action is not covered by the constitution as such, Art. 19(4) GG.43 The possibility of a violation of a “subjective right” (Schutznorm) must be asserted to gain standing in an administrative court. According to traditional legal understanding, these are only such norms of public law that that are intended to serve not only the general interest but at least an individual interest.44 Whether a particular legal provision is meant to protect and serve the individual interests is to be determined on the basis of methodological interpretation by the court. The general methods of legal interpretation apply: text/wording, the legislator’s intention as well as the stated purpose of the provision. An individual’s standing is thus always determined by the question of whether he or she is arguing that a “subjective right” has been infringed. How this applies with respect to climate change is assessed below. Yet, even if standing is approved, the scope of judicial review is more often than not limited to compliance with the subjective right asserted. Objective judicial review is foreign to German administrative procedural law. So far, this also applies to compliance with (European) specialist environmental law.45 Only actual expropriation (e.g. as a result of a planning approval decision according to § 74 Administrative Procedure Act (VwVfG)) will justify a full judicial review of the legality of the administration’s decision, including environmental rules and statues. Still, the scope of judicial review is limited to whether the particular breach (e.g. in terms of nature conservation law) had any causal effect on the subjective right claimed. The standing of environmental NGOs (who generally operate as registered charities/ associations (e. V.) and thus as legal entities with legal capacity under civil law46) is also primarily determined, as with natural persons, by whether subjective rights exist under the legal system and may be violated. At the same time, under the Environmental Appeal Act, (certain) environmental associations are entitled to supra-individual rights of action in the field of environmental law, which natural persons have so far been unable to invoke – or at least only to a very limited extent:47 In the past decades certain environmental NGOs in Germany have increasingly been given opportunities to take representative actions aimed at an objective judicial review of defined decisions – and most recently certain plans and programs as well.48

43 Sachs in: Sachs, Grundgesetz, 8th ed., 2018, Art. 19 mn. 126 with further reference; instead of numerous: BVerfG, decision of 10.6.2009, BvR 198/08, juris, mn. 9. 44 In depth: Ramsauer, JuS 2012, 769. 45 In this regard, the BVerwG has submitted a preliminary ruling to the European Court of Justice (ECJ) on the Water Framework Directive: BVerwG order of 25 April 2018, – 9 A 16.16 = ZUR 2018, 615; state of the discussion: Held, DÖV 2019, 121 ECJ Case C-535/18–IL and others v. Nordrhein-Westfalen Request for a preliminary ruling from the BVerwG not yet published – Court Reports-general. 46 § 21 BGB; see for example: Greenpeace e. V.; Germanwatch e. V., BUND e. V. 47 Particularly noteworthy are § 64 of the Federal Nature Conservation and Landscape Management Act (BNatSchG) and the above-mentioned UmwRG, whereby only the latter is of practical significance. 48 Standardized in the BNAtSchG and UmwRG.

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With the adoption of the Aarhus Convention49 and particularly its transposition into European50 and national law,51 and the rulings of the Aarhus Convention Compliance Committee (ACCC) established under Art. 15 of the Aarhus Convention, the role of environmental associations (and thus civil society participation) has gained considerable legal significance52. The Environmental Appeals Act (UmwRG), which entitles recognised environmental associations to lodge appeals against enumerated approval decisions (approvals for projects with high environmental relevance), is of considerable practical significance in this respect.53 The UmwRG contains an altruistic possibility of legal action, the aim of which is not to enforce the rights of third parties (private individuals), but to demand compliance with environmental law in the sense of objective judicial review.54 However, under the UmwRG this possibility of review has two major limitations: Only environmental associations recognized in accordance with § 3 UmwRG have the right to take legal action (personal scope of application) and the objects of the action are limited to categories listed in § 1 UmwRG (material scope of application). Insofar as the challenged decision, action or omission does not explicitly fall within the scope of application of the UmwRG, the admissibility of the action is to be denied. Climaterelevant cases in the strict sense will normally fall outside the scope of § 1 EAA. The former restriction is not discussed in depth here but is currently subject to review in the Aarhus Compliance Committee.55 Thus, as it stands, NGOs formal roles in court can be divided into claims in which the violation of a subjective right (of the organization, such as their own property) is asserted and claims aiming at pure compliance with objective environmental law, which private individuals are currently unable to enforce.56 It should be noted that the first possibility is limited. Should an environmental association want to review a climate relevant decision or omission by using a property right (through a plot of land affected by a certain project approval, e.g. raw material extraction), German courts mostly denies the right to bring an action on the grounds of the “abuse of rights” doctrine. Acquiring the land solely for the purpose of bringing proceedings infringes the principle of the permissible exercise of rights.57

49 Convention on access to information, public participation in decision-making and access to justice in environmental matters of 25.6.1998. 50 Directive 2003/4/EC of 28.1.2003 on public access to environmental information and repealing Council Directive 90/313/EEC; Directive 2003/35/EC of 26.5.2003 providing for public participation in respect of the drawing up of certain plans and programmes relating to the environment and amending with regard to public participation and access to justice Council Directives 85/337/EEC and 91/61/EC (EIA Directive); Directive 2001/42/EC of 27.6.2001 on the assessment of the effects of certain plans and programmes. 51 Act on supplementary provisions on remedies in environmental matters pursuant to EC Directive 2003/35/EC (Environmental Appeal Act) of 7.12.2006 (Federal Law Gazette I, 2816) (UmweltRechtsbehelfsgesetz, UmwRG). 52 Köck, ZUR 2016, 643 (644). 53 § 1 (Scope of Application) UmwRG. 54 Fellenberg/Schiller, in: Landmann/Rohmer, Umweltrecht, 90th ed., June 2019, UmwRG before § 1mn. 5. 55 PRE/ACCC/C/2020/178 Germany, available: https://www.unece.org/environmental-policy/conventions/public-participation/aarhus-convention/tfwg/envppcc/envppcccom/preacccc2020178-germany.html. 56 The exemplary list is from Saurer (fn. 26), 682. 57 BVerwG, judgment of 25.1.2012, 9 A 6/10, juris.

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III. Formal role of NGO’s in climate litigation against the state 1. Standing in project related actions With regard to climate-related complaints against the administration, the main means of redress are complaints against climate-damaging projects, usually against development consent or permits for the benefit of the executive itself (e.g. road construction) or third parties (e.g. harbour construction). These can be cases evolving around approval decisions or other administrative decisions for power plants, industrial plants, infrastructure measures (roads), or mining of raw materials. This type of action was defined as climate litigation in the broad sense above and in this type of action, NGOs normally have direct access to court under the Environmental Appeals Act (EAA) in accordance with § 1. 29 The problem here is not so much standing but the definition of a certain standard or allowed behaviour. So far, despite the cases being before them brought by NGOs and thus subject to full scrutiny under the EAA, courts in Germany have been reluctant to apply substantive climate protection standards. Even if climate targets might be endangered, there is little substantive law to link the project to such targets. A decision like in New South Wales, Australia has not yet occurred in Germany. The Land & Environment Court of New South Wales court was tasked to review the authorities’ rejection to grant an application to construct an open cut coal mine. The court found that the project was not in the public interest after weighing costs and benefits of the project, including the climate change impacts of the mine’s direct and indirect greenhouse gas emissions.58 28

2. Compliance with climate protection targets or other rules of climate law a) Standing under the Environmental Appeals Act. More interesting perhaps with respect to the topic of this book is the enforcement of and compliance with (binding) climate protection targets and applicable specific climate protection law. Such provisions are found in the climate regime set out by the EU59 as well as in the new Federal Climate Protection Act,60 or specific national statutes such as the coal phase out law, or energy efficiency requirements. 31 § 1 No. 4 EAA seems to apply directly only the adoption of the climate change programme according to § 9 Climate Protection Act as clarified now by Attachment 5, No. 2.13 of the Environmental Impact Assessment Act (UVPG). NGOs might thus challenge the programme in court. 32 In all other instances, litigation might prove more difficult, given that pure enforcement of legal standards is not enumerated in § 1 EAA, particular no. 6 which relates Administrative acts concerning monitoring or supervisory measures for the implementation or execution of decisions in accordance with paragraphs 1 to 5 (i.e. normally projects “Vorhaben” which require an Environmental Impact Assessment (EIA)). 33 A claim for general enforcement of an objective norm of climate change law would therefore not be admissible under the EAA. The question here is therefore: could an NGO enforce objective climate law, such as upholding of climate targets, the proper calculation of inventory data, or other decisions or omissions in German courts? 30

58 Land & Environment Court of New South Wales, Decision of 02.08.2019, available on: http:// climatecasechart.com/non-us-case/gloucester-resources-limited-v-minister-for-planning/. 59 See for a summary of the respective legal acts which are currently still being challenged in court for their inadequacy General Court Order of 8 May 2019, T-330/18 – Application of nullification and noncontractual liability. 60 Bundesklimaschutzgesetz, 12.12.2019, BGBl. I 2513.

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This is an important question since private individual’s access to court will most 34 likely be restricted, since the Climate Protection Act itself states that “subjective rights” are not established through the Act (§ 4 (1) sentence 7). This means that only cases in which infringements of human rights can be argued might be admissible: Environmental and climate protection law standards are normally not directly intended to serve individual interests according to the prevailing understanding, but rather constitute objective law. To gain standing in an administrative court, the plaintiff would have to claim that his rights have been violated by an environmentally harmful measure of the state itself (e.g., property affected or affected by noise emissions from a project). This was done successfully in the Climate Case against the German Government where the administrative court of Berlin stated that generally, rights such as health, property and others could be negatively affected by climate change, see below. But the German legal position is not assertive, since both the Aarhus Convention and EU developments must be taken into account. b) Development of the right of action by associations: influence of the Aarhus 35 Convention. The starting point for the following considerations is that the Aarhus Convention (AC) obliges the EU as well as all Member States, among other things, to grant NGOs broad access to courts for review procedures in environmental matters.61 Art. 9 of the AC is relevant in this respect. This distinguishes between access to justice – in matters concerning access to environmental information (Art. 9.1 AC) – matters relating to the legality of decisions, acts or omissions under Art. 6 of the Convention (Art. 9.2 AC) – as well as access to administrative or judicial proceedings in other matters, as far as the enforcement of environmental provisions of national law by public authorities or private persons is concerned (Art. 9.3 AC). Art. 9.2 AC essentially concerns access to justice in certain environmental matters 36 listed in more detail in Art. 6 and Annex 1 of the Convention. In various decisions (Trianel Decision62, Altrip Decision63 and in the ruling of 15 October 201564 on the infringement proceedings of the EU Commission), the ECJ repeatedly found that the German legislator had breached the European EIA Directive65 (the European implementation of Art. 9.2 AC), as the limited national possibilities for judicial review did not

61 See in detail: Schlacke/Römling, in: Schlacke/Schrader/Bunge, Aarhus-Handbuch, 2nd ed., 2019, § 3 mn. 38 et seq. 62 ECJ Case C-115/09 Bund für Umwelt und Naturschutz Deutschland e. V. v. Landesverband Nordrhein-Westfalen [2011] –ECR I-3673. 63 ECJ Case C-72/12 Gemeinde Altrip and Others v Land Rheinland-Pfalz [2013] published in the electronic Reports of Cases (Court Reports – general). 64 ECJ Case C-137/14 Commission/Germany [2015] published in the electronic Reports of Cases (Court Reports – general). 65 Directive 2014/52/EE of the European Parliament and of the Council of 16.4.2014 Amending directive 2011/92/EU on the assessment of the effects of certain public and private projects on the environment.

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suffice. This is why the EAA has been regularly amended in recent years66 and the catalogue and conditions of access to justice for NGOs67 have been extended.68 37 In addition, in its ruling on the “Slovakian brown bear69”, the ECJ obliged national courts to indirectly apply and give meaning to Art. 9.3 AC, which had at the time (2011) not been implemented at either Union70 or national level71. In accordance with Art. 9.3, each Party shall ensure that (without prejudice to the review procedures referred to in Arts 9.2 and 3), members of the public, provided they meet any criteria laid down in its domestic law, have access to administrative or judicial procedures to challenge acts and omissions by private persons and public authorities which contravene provisions of its domestic law relating to the environment. 38 The ECJ stated that Art. 9.3 AC is not directly applicable due to the lack of transposition into Union law. Nevertheless, national courts must interpret national procedural law with regard to the admissibility criteria as far as possible in accordance with both the objectives of Art. 9.3 AC and the objective of effective judicial protection of rights conferred by Union law.72 The aim of Art. 9.3 AC is to guarantee broad access to justice, despite the possibility for each State Party to determine the rules on admissibility. Access to justice should be the rule, not the exception.73 39 Building on this case law, the Federal Administrative Court (BVerwG) established a “representative action” by interpreting § 42 (2) VwGO74 and thus the main standing rule in administrative law in its ruling on the Clean Air Plan Darmstadt75. This right of action would arise for subject matters which did not fall within the scope of application of § 1 UmwRG (old version). It reasoned that § 1 EAA could not be extended by analogy and that Art. 9.3 AC was not directly applicable due to the lack of transposition. However, in the light of ECJ case-law, an NGO is entitled to a subjective public right to draw up a clean air plan in accordance with Art. 47 (1) of the Federal Immission Control Act (BimSchG) which is consistent with fundamental Union rights, if a natural person is entitled to this right (here the right to physical integrity).76 This would combine the standing of NGOs with subjective rights. In a later judgement,77 the BVerwG denied judicial review of exclusively objective environmental regulations.78 66 Gesetz zur Änderung des Umwelt-Rechtsbehelfsgesetzes und anderer umweltrechtlicher Vorschriften v. 21.1.2013, BGBl 2013 I, 95; Gesetz zur Änderung des UmwRG zur Umsetzung des Urteils des EuGH v. 7.11.2013 in der Rechtssache C-72/12 v. 20.11.2015, BGBl 2015 I, 2069; last amended by Art. 2 (18) G zur Modernisierung des Rechts der Umweltverträglichkeitsprüfung of 20.7.2017 (BGBl. I, 2808). 67 It should be noted that while the Aarhus Convention is an instrument vested in human rights, the German system has opted to focus standing rights on NGOs and not to extend admissibility of private individuals. 68 Much has been published about this: Pernice-Warnke, DÖV 2017, 846; Franzius, DVBl 2018, 410; Schlacke, NVwZ 2019, 1392; Schmidt/Stracke/Wegener/Zschiesche, Die Umweltverbandsklage in der rechtspolitischen Debatte, Study commissioned by the Federal Environment Agency (UBA), 2017, 61, availabe: www.uba.de. 69 ECJ Case C-240/09 Lesoochranárske zoskupenie VLK v Ministerstvo životného prostredia Slovenskej republiky [2011] ECR I-01255. 70 COM(2003) 624 final of 24.10.2003. 71 See the explanatory memorandum to the draft law on the Aarhus Convention, BT-Drs. 16/2497, 46. 72 ECJ Lesoochranárske zoskupenie VLK v Ministerstvo životného prostredia Slovenskej republiky (fn. 70), mn. 50. 73 See on the ACCC’s rulings practice: Epiney/Diezig/Pirker/Reitemeyer, Aarhus Konvention, 2018, Art. 9 mns 37 et seq.; in particular on the proceedings against Germany: ACCC/C2008/31. 74 § 42 (2) of the Administrative Court Rules (VwGO). 75 BVerwG, judgment of 5.9.2013, 7 C 21/12, juris. 76 B VerwG, (fn. 75), mns 43 et seq. 77 Redarding to departure procedures established by decree for Berlin Brandenburg airport (the socalled Müggelsee route). 78 BVerwG, judgment of 18.12.2014, 4 C 35.13, juris, mns 57 et seq.

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This would mean that judicial review of climate change law enforcement would be very limited indeed, given that such rules are mostly designed to protect the environment at large. In parallel, the Aarhus Compliance Committee was called upon to scrutinize the EAA in its old version as part of a complaint of failure to transpose Art. 9.3 AC on behalf of Germany. The 5th Conference of the Parties confirmed the recommendations of the ACCC to Germany to remedy the non-compliance with Arts 9.2 and 9.3 AC by decision V/9 h of 2.7.2014.79 In the monitoring phase the ACCC found that – with the latest amendment of the EAA – Germany had sufficiently implemented the ruling. Indeed, as set out in the materials to the new EAA, the legislator hat set out to implement the requirements of the ECJ, the case law of the BVerwG and the ACCC 1:1. A more extensive implementation was explicitly not intended,80 and there is widespread agreement in the literature and recent case law that the current implementation remains deficient.81 In December 2017, the ECJ made another important decision for Art. 9.3 AC (Protect Decision),82 in which it extended the rights to judicial review for NGOs. The court reiterated that Art 9.3 AC does not have direct effect as such in Union law. However, in conjunction with Art. 47 of the Charter of Fundamental Rights of the European Union, Art. 9.3 AC requires the Member States to ensure effective judicial protection of the rights guaranteed by Union law, in particular the provisions of (objective) environmental law.83 It stated that, if it is not possible to interpret a provision in a manner consistent with Union law, the national court must set aside the national procedural rule according to which standing is denied.84 The decision, taken in the context of Art. 4 of the Water Framework Directive85, is understood as a far-reaching opening of the right to judicial review for NGOs to ensure compliance with objective European environmental law.86 The case law of the ECJ has already found its way into German administrative law. In its ruling of 18 April 201887, the Administrative Court of Berlin found the claim of an NGO to establish the unlawfulness of a statutory order (introduction of regular operation of gigaliners) to be admissible, although the EAA does not provide for standing against such orders in its § 1. The court stated that, according to the Protect ruling, the environmental association must be able to enforce compliance with purely objective environmental regulations, which are based on Union environmental law, in court.88 Contrary to this, the Administrative Court of Düsseldorf held that it could not go beyond the scope of the EAA in a claim for the decommissioning of certain 79 https://www.unece.org/environmental-policy/treaties/public-participation/aarhus-convention/ envpptfwg/envppcc/envppccimplementation/fifth-meeting-of-the-parties-2014/germany-decision-v9h. html. 80 Statement of reasons for the law: BT-Drs. 18/9526 of 5.9.2016, 37. 81 Franzius, NVwZ 2018, 219; Klinger, ZUR 2017, 577; Schlacke, NVwZ 2017, 905; Schlacke (fn. 69); so probably Sauer, EurUP 2019, 33 (43). 82 ECJ Case C-664/15 Protect Natur-, Arten- und Landschaftsschutz Umweltorganisation v Bezirkshauptmannschaft Gmünd [2017] published in the electronic Reports of Cases (Court Reports – general). 83 ECJ Protect Natur-, Arten- und Landschaftsschutz Umweltorganisation v Bezirkshauptmannschaft Gmünd (fn. 82), mn. 45. 84 ECJ Protect Natur-, Arten- und Landschaftsschutz Umweltorganisation v Bezirkshauptmannschaft Gmünd (fn. 82), mn. 55. 85 Directive 2000/60/EC of the European Parliament and of the Council of 23.10.2000 establishing a framework for Community action in the field of water policy. 86 Wegener, ZUR 2018, 217 (219); comments of Klinger, NVwZ 2018, 225 (231). 87 Administrative Court Berlin (11th chamber), judgment of 18.4.2018, 11 K 216.17, BeckRS 2018, 9006. 88 Administrative Court Berlin (fn. 87), mns 22, 23.

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vehicles affected by the diesel scandal.89 The Administrative Court of SchleswigHolstein recently referred the question to the ECJ for a preliminary decision.90 The Administrative Court of Sigmaringen, on the other hand, followed the case law of the Berlin Administrative Court and justified this explicitly with the legal institution of the representative action established 2013 by the Federal Administrative Court.91 44

c) What does this mean for monitoring compliance with and enforcing climate law? The case law of the European Court of Justice and its implementation by the Administrative Courts of Berlin and Sigmaringen is, as we understand it, clear: environmental associations can review and enforce Union environmental law in court. This might prove crucial for climate claims:

aa) The decision of the A.C. Berlin of 31.10.2019. The right to judicial review has reached its climax so far in the decision of the Berlin Administrative Court of 31 October 2019, the ruling on the first German climate case before a German specialist court.92 Three families of organic farmers and the environmental organisation Greenpeace e. V. had filed a complaint against the German government to enforce the German climate target of reducing greenhouse gas emissions in Germany by 40 % until the end of 2020 compared to 1990. The claim was dismissed for lack of standing, but because of its fundamental importance the appeal was allowed.93 46 While for the natural plaintiffs a violation of fundamental rights was at the centre of the legal dispute (above all Art. 14 of the Basic Law)94, the legal standing of Greenpeace e. V. Germany, was also discussed at the hearing. 47 It is undisputed that Greenpeace is currently not an environmental association recognised under the EAA (personal scope of application). Furthermore, a claim addressed to the government for compliance with a climate protection plan95 is not a decision or action listed in the catalogue of § 1 EAA (material scope of application). 48 In this respect, the 10th chamber of the Administrative Court Berlin did not take long to apply the EAA. Instead, the Court examined whether Greenpeace had a representative right of action.96 As discussed above, this institution created by the Federal Administrative Court (BVerwG)97 presupposes that a natural person has a right of action with regard to the decision in question. This is not the case, since the right of action of the natural plaintiffs had been denied by the court (no violation of fundamental rights in the concrete instance yet). The court further states, with reference to the case law of BVerwG, that Art. 9.3 AC is not directly applicable.98 In a third step, the Court examines whether legal standing arises from the Protect case law of the ECJ,99 and states that “even if environmental associations could demand objective judicial review of compliance with European environmental law”, this must be denied in the present case, 45

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Administrative Court Düsseldorf, judgment of 24.01.2018, 6 K 12341/17, juris. Administrative Court Schleswig, order of 20.11.2019 – 3 A 113/18, BeckRS 2019, 29226. 91 Administrative Court Sigmaringen, judgment of 14.11.2018 – 10 K 118/17, BeckRS 2018, 38016, mn. 117. 92 Administrative Court Berlin (10th chamber) (fn. 23). 93 https://www.greenpeace.de/themen/klimawandel/klimaschutz/teilerfolg-der-klimaklage-0. 94 See therefore: Frenz, UPR 2020, 1; Freytag, ZUR 2019, 571; Voland, NVwZ 2019, 114. 95 The 2020 climate protection target is the subject of several cabinet resolutions under § 15 Rules of Procedure of the Federal Government (GOBReg), most recently: Action Programme Climate Protection 2020 of 03.12.2014. 96 Administrative Court Berlin (10th chamber) (fn. 23) mn. 82. 97 BVerwG (fn. 75); judgment of 12.11.2014, 4 C 34.13, juris. 98 Administrative Court Berlin (10th chamber) (fn. 23) mn. 83. 99 Administrative Court Berlin (11th chamber) (fn. 87). 90

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since the climate protection target (40 % reduction until 2020) is not based on European law requirements.100 In view of the alternative claim in the procedure, compliance with the so-called EU 49 burden-sharing decision (2006/20097/EU)101, the court simply assumed that Greenpeace as an NGO had standing, since the burden-sharing decision concerned European environmental law.102 It then went on to deny standing on the basis that Art. 3(1) in conjunction with Annex II to the burden sharing decision is “not unconditional” and therefore unable to grant the relief sought.103 The Court regarded the burden-sharing decision only as an obligation on the Member States which did not have direct effect within the meaning of the well-known case law of the ECJ on directives.104 bb) Repercussions. The judgement of the 10th Chamber of the VG Berlin of 31.10.2019 50 leaves some questions unanswered. However, in essence, the ruling is a continuation of the decision of the 11th Chamber of 18.04.2018 and is remarkable in its consistency: The court assumes that an NGO (environmental association) has general access to 51 the administrative court to enforce compliance with European environmental law. Neither the material nor the personal scope of application of the UmwRG would have to be examined according to this case law. The Court thus accepts general standing for NGOs to enforce an uphold the application of European environmental law. While a decision of the ECJ preliminary procedure invoked by the Administrative 52 Court of Schleswig-Holstein is still pending, it can already be assumed that compliance with European climate and environmental law can be brought to court by NGOs. This means that administrative courts would no longer have to argue about the admissibility of the action as such, but rather whether European environmental law imposes an unconditional obligation on a Member State to act and whether this obligation is infringed. The question no longer is “Can NGO enforce environmental law” but “what rule exactly constitutes EU environmental law”. The concept of EU environmental law covers not only provisions and laws explicitly aimed at protecting the environment, but also those that are more remote or implicitly concerned with environmental protection or the environment.105 This would cover e.g. rules of animal protection, health, and trade as well as product standards. d) NGO standing for the judicial review of national climate law. If one were to 53 follow the Administrative Court of Berlin in assuming that compliance with objective European environmental law is generally enforceable in court, this only applies – based on the Protect ruling of the European Court of Justice – to European environmental law. This would mean that any rule of climate law based solely in German law would remain unenforceable, probably both by individuals and NGOs. Referring back to the Slovakian brown bear and the Protect decisions: the legal 54 foundation is that the ECJ assumed that the provisions of the Aarhus Convention

Administrative Court Berlin (10th chamber) (fn. 23). Decision under Art. 288(4) TFEU, under which Member States are obliged to reduce their greenhouse gas emissions in economic sectors not covered by the EU emissions trading scheme by a total of 10 % by 2020 compared with 2005, Germany falls well short of its reduction target of 14 %. 102 Administrative Court Berlin (10th chamber) (fn. 23) mn. 93. 103 Administrative Court Berlin (10th chamber) (fn. 23) mn. 93. 104 ECJ Case C-152/84 M. H. Marshall v Southampton and South-West Hampshire Area Health Authority (Teaching) [1986] ECR I – 00723. 105 Administrative Court Berlin (10th chamber) (fn. 23) mn. 25 with regard to: Epiney/Diezig/Pirker/ Reitemeyer (fn. 74) Art. 9 mn. 37. 100 101

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form an integral part of the legal order of the European Union106 and the ECJ combines the indirect application of 9.3 AC with Art. 47 of the Charter of Fundamental Rights (CFR). For the Member States, Art. 47 CFR is relevant via Art. 51 (1) sentence 1 CFR stating that it is a matter of the judicial enforcement of provisions of the Union that establish rights and when provisions of their national administrative procedural law and/or administrative procedural law become relevant for this (e.g. § 42 (2) VwGO).107 55 The Administrative Court Berlin assumed that the Federal Government’s climate protection plan 2020 was not based on Union environmental law. The same might be said for the new Climate Protection Act which establishes binding national targets which implement de facto EU climate law, but are distinct. The question therefore arises whether national climate protection law is in danger of being completely excluded from the right to enforcement review. 56 In the legal literature, there are significant voices indicating that the case law of the ECJ is limited to environmental law under Union law.108 This is convincing in view of the mandate of the ECJ (application and interpretation of EU law). Nevertheless, the case law could be further developed and extended to national environmental rules. First of all, the starting point for the ECJ is the wording of Art. 9.3 AC according to which access to justice is to be ensured against acts and omissions that violate environmental provisions of national law. It is true that the case law of the ECJ only covers the judicial enforcement of Union environmental law (Art. 19 (3) TEU). However, the Federal Republic of Germany as such is also a party to the Aarhus Convention.109 Art. 9.3 AC therefore also applies to the judicial enforcement of purely national environmental law.110 57 The national courts are not precluded from independently interpreting Art. 9.3 AC within the meaning of § 42 (2) VwGO, following the case law of the BVerwG on the representative rights of action. As the Administrative Court Sigmaringen correctly states, the BVerwG itself provides the interpretative pathway: Accordingly, the (substantive) environmental law provisions of the Union as well as the national environmental law provisions constitute provisions which may give rise to a right of action within the meaning of Art. 42 (2) VwGO. On the basis of all this, the effect of protecting third parties within the meaning of the theory of protection standards can then no longer be relevant.”111 58

The history and meaning of Art. 9.3 AC must be taken into account in this interpretation from a German perspective. At the time of ratification of the Aarhus Convention, 9.3 AC was considered to have already been implemented by § 42 (2) VwGO (i.e. including the need for infringement of a subjective right). After the development of case law outlined above (both by the ACCC and the ECJ), it became clear that this is not the case and Art. 9.3 AC requires independent access to court, which is hardly compatible with the requirement of third-party individual rights being infringed.112 106 ECJ Lesoochranárske zoskupenie VLK v Ministerstvo životného prostredia Slovenskej republiky (fn. 70), mn. 30; in depth: Berkemann, DVBl 2013, 1137 (1139). 107 See on legal dogmatic: Berkemann (fn. 106), 1139; Schlacke (fn. 69), 1400. 108 Fellenberg/Schiller, in: Landmann/Rohmer (fn. 55) § 1 mn. 45 with further references. 109 The Aarhus Convention is a so called “mixed agreement” (gemischtes Abkommen): BVerwG (fn. 75), mn. 20. 110 So explicitly Wegener, (fn. 86); so probably, Klinger (fn. 86), 231 et seq. 111 Administrative Court Sigmaringen (fn. 91), mn. 117. 112 To the historic context: Klinger, EurUP 2019, 51 (53); Schmidt/Stracke/Wegener/Zschiesche (fn. 69), 57 with further references; see the draft law for the Approval Act law for AC: BT-Drs. 16/2497, 46.

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3. Climate litigation against the state: Climate legislation Climate complaints for more climate protection can also be directed at the legislature 59 for more ambitious climate protection legislation, in particular the establishment of binding and sufficient CO2 reduction obligations. a) Individual claim to the Federal Constitutional Court. In Germany, the obliga- 60 tion to act legislatively – i.e., to make climate protection legislation more effective – would be subject to the jurisdiction of the Federal Constitutional Court (BVerfG) in the form of the individual constitutional complaint, Art. 93 (1) No. 4a of the Basic Law, § 90 (1) of the Federal Constitutional Court Act (BVerfGG). According to these rules, anyone can lodge a constitutional complaint with the Federal Constitutional Court claiming that one of his fundamental rights or one of his rights contained in Art. 20 (4), Arts 33, 38, 101, 103 and 104 of the Basic Law has been violated by a public authority, including the legislative. The starting point of such a claim would be the idea that the legislator is violating the 61 existing duty to protect113 the basic rights to human integrity (Art. 1), life and physical integrity (Art. 2 (1)), property (Art. 14 of the Basic Law) and freedom of profession (Art. 12 of the Basic Law) by insufficient legislation. The state or its acting constitutional organs have a wide scope for assessment in the fulfilment of fundamental rights protection obligations. A plaintiff must show that the State has manifestly failed to fulfil its obligations to protect if protection measures have either not been taken at all, if the regulations and measures taken are manifestly unsuitable or completely inadequate or if they fall considerably short of the protection objective.114 For climate complaints, the task would therefore be to show that the consequences of 62 climate change affect fundamental rights115 and that, on the basis of scientific findings, the legislator’s scope for action with regard to protection against the consequences of climate change is limited, so that stricter climate protection targets must be adopted. This kind of complaint has already been launched in Germany116. b) Constitutional complaint by an NGO based on individual rights. An environ- 63 mental association would have also claim the violation of fundamental rights by legislative action or omission.117 However, the association cannot claim a violation of the right to physical integrity.118 For this to happen, the environmental association would have to be 113 BVerfG, non-adoption decision of 15.3.2018, 2 BvR 1371/13, juris; BVerfG, judgment of 26.7.2005, 1 BvR 782/94 and 1 BvR 957/96, juris. 114 Instead of many: BVerfG, decision of 26.7.2016, 1 BvL 8/15, NJW 2017, 53 mn. 70; Steinberg, NJW 1996, 1985. 115 See on the impact of climate change on fundamental rights of freedom: Hornberg/Niekisch/Calliess/ Kemfert/Lucht/Messari-Becker/Rotter, Demokratisch regieren in ökologischen Grenzen – Zur Legitimation von Umweltpolitik, German Advisory Council on the Environment (SRU), June 2019, 7; basically: Calliess, Rechtsstaat und Umweltstaat, zugleich ein Beitrag zur Grundrechtsdogmatik im Rahmen mehrpoliger Verfassungsrechtsverhältnisse, 2001, Dritter Teil: Rechtsstaatliche Grenzen des Umweltstaates, b); Calliess, in: Merten/Papier, Handbuch der Grundrechte in Deutschland und Europa, Band II: Grundrechte in Deutschland – Allgemeine Lehren I, § 44 Schutzpflichten. 116 See the complaints: https://germanwatch.org/sites/germanwatch.org/files/Verfassungsbeschwerde% 20FINAL%20f%C3%BCr%20web.PDF ; https://www.duh.de/fileadmin/user_upload/download/Pressemitteilungen/Umweltpolitik/Klimaschutz/Verfassungsbeschwerde_Klimaklage_Linus_Steinmetz_et_al_final_ geschw%C3%A4rzt-Anhang_01.pdf. 117 The fundamental rights also apply to domestic legal persons insofar as they are by their nature applicable to them, Art. 19 (3) of the Basic Law. 118 Remmert, in: Maunz/Dürig, Grundgesetz, 88th ed., August 2019, Art. 19 (3) mn. 101 with further references.

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the owner of a plot of land or a business (e.g. a forest plot, agricultural business) and claim that its existence is threatened by the consequences of climate change. This is possible, especially with regard to nature conservation zones in coastal areas. 64 As discussed above, the Constitutional court would accept such status as basis of standing even if the acquisition of such a property was only the purpose of the trial.119 As a general rule, the protection afforded by the basic right of ownership does not depend on the motive for the purchase of the land, the time of its acquisition or other accompanying circumstances.120 c) Altruistic constitutional complaint? It has not yet been clarified whether NGOs can lodge supra-individual constitutional complaints on the grounds that insufficient legislative measures for climate protection are at the same time a violation of environmental regulations, enabling standing for NGOs as discussed above. Friends of the Earth Germany (BUND e. V.) is taking this path with the constitutional complaint filed on 23.11.2018 with various private individuals and the Solarenergie Fördervein Deutschland e. V.121 The application has been published.122 BUND claims a violation of its fundamental right to general freedom of action under Arts 2 (1), 19 (3) of the Basic Law in conjunction with Art. 20a GG in connection with Art. 47 of the charter of fundamental rights of the European Union (CFR) by inadequate climate protection legislation.123 66 The application applies the above-mentioned case law of the European Court of Justice to constitutional complaints on the grounds that the constitutional complaint alleges a violation of climate protection objectives laid down by Union law, in particular a breach of the reduction obligation under Art. 3 in conjunction with Art. 3 of the Annex II of Decision No 406/2009 in 2020 (burden sharing decision), see already above.124 67 It remains to be seen whether the court will follow this line of argument. Ultimately, the recognition of BUND’s right to appeal would amount to an altruistic constitutional complaint. Yet, the standard for examining a constitutional complaint will entail difficulties, since it does not cover Union environmental law as such, but only specific constitutional law, i.e. the alleged violation of the complainant’s fundamental rights. Under certain circumstances, however, the CFR could be the standard for reviewing a constitutional complaint. According to the case-law of the Federal Constitutional Court, this may be possible, inter alia, in a case that is completely determined by Union law.125 Even if Union fundamental rights were to become the standard for review, it is at least not necessarily evident that there is a violation of such a provision, in this case Art. 47 CFR. It should be noted that the case law of the ECJ (only) requires effective access to the courts within the meaning of Art. 9.3 AC. 68 Art. 9.3 AC refers to “acts of private persons and public authorities”. According to Art. 2 No. 2 sentence 2 AC, this excludes bodies or institutions acting in a judicial or legislative capacity.126 65

119 BVerfG, Judgement of 17. 12. 2013, 1 BvR 3139/08, 1 BvR 3386/08 (Garzweiler II), juris, mns 154‐ 157 = NVwZ 2014, 211. 120 BVerfG, NVwZ 2014, 211, mn. 157. 121 https://www.bund.net/service/presse/pressemitteilungen/detail/news/verfassungsklage-wegen-unzureichender-deutscher-klimapolitik/. 122 https://klimaklage.com/wp-content/uploads/2019/04/Klageschrift.-Stand-Nov.-2018-2.pdf#. 123 (fn. 122), 96 et seq. 124 (fn. 122), 112. 125 BVerfG, decision of. 6.11.2019, 1 BvR 276/17, juris; explanatory note: Hoffmann, NVwZ 2020, 33. 126 Epiney/Diezig/Pirker/Reitemeyer (fn. 74), Art. 2, mn. 9.

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IV. Passive legal status of NGO’s The role of NGOs in climate change litigation can also be extended to a more passive 69 process role.

1. Intervention It is conceivable that an NGO might request to be summoned to appear before an 70 administrative court in a legal dispute brought by a third party (e.g. one or more private individuals) essentially as an “intervener third parties” (“Beigeladener”). This is stipulated in § 65 VwGO and enables the court – as long as the proceedings have not yet been finally concluded or are pending in a higher court – to summon or invite as intervener third parties whose legal interests are affected by the decision, either of its own motion or on application. The legal interest for of an NGO can result from qualified procedural rights such as 71 the participation rights of recognized nature conservation associations under the Federal Nature Conservation Act.127 Ultimately, the interest can also arise from the fact that the NGO can contribute to the clarification of the facts of a particular case by providing expertise. Ultimately, however, the legal institution of the intervention is only applicable if a direct application of the NGO is ruled out but the NGO nevertheless wishes to have a legal standing which would be achieved by the additional summons.

2. Amicus Curiae – “friend of the court” The Amicus curiae – the friend of the court, is a legal institution from Anglo- 72 American law, in which the court is supported in terms of content (by a written pleading). This institute is foreign to the German legal system. The only formal place such a third party intervention has is in the constitutional complaint procedure. Especially with regard to highly relevant political issues, extensive consultation procedures are carried out by the court. However, an unsolicited written submission to a court during court proceedings will not be allowed.128 Therefore, the amicus curiae will not have any significance in the German legal system.

V. Perspective climate litigation to enforce climate law Having considered the theoretical approaches for active and passive role of NGOs in 73 climate litigation, some perspectives and approaches for future climate complaints before German courts are warranted. Given the dynamic nature of both the international regime (both Germany and the EU are parties to the UN FCCC and the Paris Agreement129) and the EU and national regimes for climate protection, this is a “moving target” – what can be claimed in front of courts largely depends on substantive rules, and not procedures. However, there are some general directions: First, given the finding that NGOs have access to court to review and enforce EU 74 environmental law, it becomes clear that future climate actions will easily be directed Czybulka/Kluckert, in: Sodan/Ziekow, Verwaltungsgerichtsordnung, 5th ed., 2018, § 65 mn. 82. On constitutional complaints: Zuck, NVwZ 2016, 1130. 129 In Germany, ratification took place through the “Law on the Paris Convention of 12.12.2015” of 28.9.2016, BGBl. Part II, 2016, No. 26 of 30.09.2016. 127 128

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towards compliance with EU climate protection law and regulations (enforcement actions). Also, the Paris Agreement is to be considered in its influence through EU law. While no directly enforceable obligation arises from the UNFCC or the Paris Agreement, the accession of the EU to the Agreement affords it with “the robust law enforcement instruments” of Union law in Germany.130 75 Second, given the increasingly binding framework of climate protection targets in sectors or states, the climate impacts of certain measures can increasingly become the subject of legal disputes. NGOs will normally have standing under the EAA, see above. 76 Third, at least in the long term, adaptation strategies to climate change will also have to be implemented, with legal disputes arising on whether certain regions, coastal or low lying areas should be abandoned, e.g. before rising sea levels, or protected, as well as about costs. It is possible that NGOs have a role to play in such claims.

1. Obligations under the EU Governance Regulation The Member States of the European Union have committed themselves to reduce their overall greenhouse gas emissions by 40 % by 2030 compared to 1990 levels, and by 80 % by 2050. An essential instrument for achieving these goals is Regulation (EU) 2018/1999 of 11.12.2018 on the governance system for the Energy Union and for climate protection.131 The objective of this Regulation is to establish a reliable, inclusive, cost-effective, transparent and predictable governance system for the Energy Union and for climate change mitigation, in order to achieve the objectives and targets of the Energy Union up to 2030 and in the longer term, in accordance with the Paris Agreement.132 The Governance Regulation contains complex legal mechanisms to ensure compliance with both goals. 78 One of the core elements is that each Member State must submit an national integrated energy and climate plan to the Commission first by 31 December 2019 and subsequently by 1 January 2029 and every ten years thereafter (Art. 3(1) of the Regulation, ‘NECP’). The first plan covers the period 2021 to 2030, taking into account the longer-term perspective. The plans must contain the elements listed in paragraph 2 and in Annex I of the Regulation. 79 The Regulation provides for unconditional public participation. Art. 10 stipulates that (without prejudice to other requirements under Union law) each Member State shall ensure that the public is given early and effective opportunities to participate in the preparation of the draft NECP. When forwarding the NECP to the Commission, each member state must attach a summary of the comments or preliminary comments from the public. In addition, Art. 10 explicitly refers to the SEA Directive133, where applicable. At its core, the SEA Directive contains an obligation to carry out a strategic environmental assessment (SEA) of plans and programmes which are prepared and/or adopted by a public authority.134 In German law, there is so far no transposition of this obligation for the preparation of the NECP. While there was opportunity for public 77

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So Saurer, NVwZ 2017, 1574 (1577). Regulation (EU) 2018/1999 of the European Parliament and of the Council of 11.12.2018 on the Energy Union and Climate Change Governance System, amending Regulations (EC) No 663/2009 and (EC) No 715/2009 of the European Parliament and of the Council, Directives 94/22/EC, 98/70/EC, 2009/ 31/EC, 2009/73/EC, 2010/31/EU, 2012/27/EU and 2013/30/EU of the European Parliament and of the Council, Council Directives 2009/119/EC and (EU) 2015/652 and repealing Regulation (EU) No 525/2013 of the European Parliament and of the Council. 132 Recital No 1. 133 Directive 2001/42/EC of the European Parliament and of the Council of 27.6.2001 on the assessment of the effects of certain plans and programmes on the environment. 134 In detail: Lammers/Römling, ZUR 2019, 332. 131

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participation, a full SEA was not carried out for the draft of the NECP of the Federal Government of 4 January 2019.135 Irrespective of this, NECP are part of the implementation of EU environmental law 80 and are therefore subject to judicial review for environmental NGOs.136 This includes at least a review of the procedural provisions under Arts 3‐12, including the determination and calculation of the NECP itself (Arts 3 and 4), the determination of targets for renewable energy (Art. 5) and the determination of targets in the area of energy efficiency (Art. 6). Substantively this also includes the prohibition of deterioration in Art. 14 (3) of the Regulation (when updating the NECPS targets may not be less stringent – this is a direct implementation of the Paris Agreement) as well as the completeness of the plans under Art. 2 in conjunction with Annex I.137 In addition, Art. 15 (1) of the Governance Regulation incorporates the German 81 Climate Protection Plan 2050 into EU Law. This plan138 (adopted already in 2016) has been submitted as the German long term strategy under the Paris Agreement to the UNFCCC secretariat, and is defined in § 2 No. 7 of the Climate Change Law. Compliance with the provisions of the Governance Regulation will have to be observed in its adoption and revision – which is overall subject to judicial review. It remains to be seen whether, for example, a NGO could seek a revision of the plan (Art. 15 (1)) but it appears evident that the criteria defined in Art. 15 (4) must be observed, which is unconditional EU environmental law. The Regulation also contains extensive reporting obligations under Arts 17 et. seq., 82 some of which might also prove to be unconditional, for example Art. 20 (integrated reporting on renewable energy).

2. The EU Climate Change Regulation Another centre piece of EU climate legislation is the EU Climate Protection Regula- 83 tion or Effort Sharing Regulation (ESR), Regulation (EU) 2018/842,139 which applies to the transport, building, agriculture and waste management sectors as well as to medium and small emitters from industry and the energy sector (all of which are not covered by the Emissions Trading Scheme (ETS)). The ESR sets binding reduction commitments for Member States until 2030. The reduction rate for the EU as a whole is 30 % compared to 2005. According to 84 Art. 4 in conjunction with Annex 1 of the Regulation, each Member State has a binding target for 2030 (varying according to economic strength); for Germany this amounts to 38 % compared to 2005. Annually, the available emission quantities for each member state are defined, decreasing linearly for each Member State from the average of its emissions in 2016‐2018. Like the 2009 burden sharing decision, the EU Climate Change Regulation provides for flexibility. Member States can purchase allowances from other Member States, or transfer to other years in their account in the common registry. Even though the Regulation clearly is part of EU environmental law and thus subject 85 to judicial review, courts could argue that the obligations are not defined and uncondi135

https://www.bmwi.de/Redaktion/DE/Textsammlungen/Energie/necp.html. Lammers/Römling (fn. 134), 340; however, the authors deny this in the draft of the German NECP because of its rather non-binding political character. 137 Lammers/Römling (fn. 134), 341. 138 https://www.bmu.de/themen/klima-energie/klimaschutz/nationale-klimapolitik/klimaschutzplan-2050/. 139 Regulation (EU) 2018/842 of the European Parliament and of the Council of 30.5.2018 concerning binding annual national targets for the reduction of greenhouse gas emissions for the period 2021 to 2030 as a contribution to climate change mitigation action to meet commitments under the Paris Convention and amending Regulation (EU) No 525/2013 (OJ L 156, 19.6.2018, 26). 136

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tional (see above, Administrative court of Berlin). It remains to be seen whether this judgement, rendered in the context of the outdated effort sharing decision of 2009 and only in first instance will prove to be the standard for judicial review.

3. National climate protection law a) Long-term plan according to Art. 15 GO.VO. As was elaborated above, the Climate Change Plan 2050 is now incorporated into EU law. To what extent judicial review can and will be sought is unclear, also given the fact that the new Climate Protection Act explicitly establishes, that an SEA is to be carried out not for the long term plans, but for the Climate Protection Programme, see below. 87 Given the fact that the Paris Agreement is incorporated into EU law, and thus possibly directly applicable in parts, it would be conceivable to apply judicial review to the consistency of the Plan with the Paris Agreement, in conjunction with Art. 15 and Art. 1 of the Regulation. For example, the Regulation fully endorses the concept of the carbon budget (preamble, 10) and it might therefore be legally relevant if a long-term strategy disregards this concept. 86

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b) Federal Climate Protection Act. Some national implementation of the obligations under the Governance Regulation has been achieved through the Federal Climate Protection Act (Bundes-Klimaschutzgesetz, KSG) of 21 December 2019.140 Its purpose is to ensure that national climate protection targets are met and European targets are adhered to in order to avert global climate change, § 1 KSG. To this end, greenhouse gas emissions will be gradually reduced compared to 1990. Until the target year 2030, a reduction rate of at least 55 % applies, § 3 (1) KSG. To achieve national climate protection targets, annual reduction targets are set by specifying annual emission levels for the energy, industry, transport, buildings, agriculture, waste management and other sectors. The emission sources of the individual sectors and their delimitation result from Annex 1 and the annual emission quantities for the period until 2030 are based on Annex 2 of the KSG. If the emission data (pursuant to § 5 (1) and (2)) show that the permissible annual emissions quantity for a sector was exceeded in a reporting year, the competent Ministry must submit to the Federal Government an emergency program (Sofortprogramm) for the sector in question. This shall ensure compliance with the annual emissions quantities of the sector for the following years, § 8 (1) KSG. The Federal Government is then to discuss such measures to be taken in the affected sector or in other sectors and decides on them as quickly as possible. In doing so, it may take into account the existing leeway under the EU ESR and amend the annual emission levels of the sectors pursuant to § 4 (5), § 8 (2) sentence 1 of the KSG. It seems that – unless the provisions of any EU legal instrument are likely to be breached in the process – it would be difficult for an NGO to seek judicial review of this process. This may be different for individuals arguing personal rights infringement. Also under § 9 KSG, the Federal Government must adopt climate protection programs. Climate protection programmes are subject to a Strategic Environmental Assessment (SEA) obligation pursuant to No. 2.13 Annex 5 to § 35 (1) No. 1 Environmental Assessment Act (UVPG). The provision obliges the Federal Government to examine whether the respective climate protection program could be subject to an obligation to carry out a SEA pursuant to Art. 9 of the KSG.141 The legislator, currently, does not assume that this is the case since it is does not expect that climate protection programs under § 9 KSG will 140 141

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contain “sufficiently specific provisions for subsequent approval decisions”.142 Whether this assessment is correct now and in future is rather doubtful. The more stringent the reduction efforts become, the more the program will form the basis for concrete reduction measures (e.g. construction of solar parks or a certain railway lines). On the other hand, this consideration speaks in favour of subjecting the emergency program (Sofortprogramm, § 8) to an SEA as it is likely that these will actually contain concrete measures. If there is an obligation to carry out an SEA, the requirement for an alternative assessment is relevant, § 40 (1) UVPG.143 It could be argued that the impact of the reduction measures chosen in the program must be examined in greater detail than those chosen, even if these are not initially adopted. The climate program under § 9 KSG must be adopted “at least after each update of the climate protection plan”144; and in addition if targets are not met. In the latter case, the existing climate protection program (currently: Klimaprogramm 2030145) must be updated to include measures pursuant to § 8 (2). In each climate protection program, the Federal Government must determine which measures it will take to achieve the national climate protection targets in the individual sectors, § 9 (1) of the KSG. If the program is subject to an SEA, there is direct access to judicial review under § 1 (1) No. 4 EAA. This includes the situation in which a program is not adopted, or an SEA unlawfully omitted. An NGO could possibly therefore ask a court to oblige the Government to adopt a program if the targets are not achieved (§ 9 (1))146 or to generally conduct an SEA before adopting the program. This review would include the substantive effectiveness of the program, i.e. the prognostic effect of the measures contained therein to reach the targets contained in Annex 2 KSG. Also, this program is substantively identical to what must be achieved under the Governance Regulation, thus enshrining EU environmental law into the otherwise national regime.

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c) Climate protection and environmental impact assessment. A further area of 97 climate complaints, which has already been referred to, is the challenging of approval decisions under the UmwRG with regard to the climate compatibility of certain projects. This is particularly relevant with regard to the development of airports or road construction projects as long as fossil fuel motorization remains prevalent. For example, the question might be asked whether the greenhouse gas emissions and 98 climate impacts of the additional flight operations should be considered in the context of an environmental impact study. In 2015, the Federal Administrative Court rejected this argument in a lawsuit filed by an NGO against the expansion of Munich Airport to include a third runway – but with reference to the old legal situation.147 In contrast, the Austrian Federal Administrative Court stopped the construction of a third landing runway at Vienna International Airport in 2017 on the grounds of climate protection. After the Constitutional Court overturned the decision, the Federal Administrative Court ruled that the runway could be built under strict conditions.148 Also the UK Court of Appeal recently blocks the expansion of capacity at the Heathrow Airport for 142

Statement of reasons for the law (BT-Drs.) 19/14337, 42. In-depth: Epiney, Umweltrecht der Europäischen Union, 4th ed., 2019, 6, II, SUP-RL, mn. 94 with further references. 144 Climate Protection Plan: the German long-term strategy under the Paris Convention and Art. 15 of the European Governance Regulation, § 2 No. 7 KSG. 145 https://www.bundesregierung.de/breg-de/themen/klimaschutz/klimaschutzprogramm-2030‐1673578. 146 In this direction also arguably: Voland/Engel, NVwZ 2019, 1785 (1790). 147 BVerwG, decision of 22.6.2015, 4 B 59/14, juris, mn. 42. 148 See the procedure: Saurer (fn. 26), 682. 143

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infringement of the Paris Convention on Climate Change on 27 February 2020 due to the complaint of “friends of the Earth”.149 The Court argued that the Paris Agreement ought to have been taken into account and an explanation given as to how it was taken into account, but it was not.150 99 Under Art. 3(1)(a) c of the (current EIA Directive) 2014/52/EU of 16 April 2014, the direct and indirect significant impacts of a project on the climate must be identified, described and assessed. This is because climate change will continue to cause environmental damage and threaten economic development. In this respect, it is appropriate to assess the climate impact of projects (e.g. greenhouse gas emissions) and their vulnerability to climate change.151 According to the Annex II, IV. No. 4 the impact study must describe the impact of the project on the climate, e.g. through the type and extent of greenhouse gas emissions associated with the project, and the vulnerability of the project to the consequences of climate change (e.g. through increased risk of flooding at the site).152 100 It will be subject to further dispute how extensive the investigations and descriptions have to be and what influence the climate impact will have on a fair exercise of discretionary decisions. In Germany, for large infrastructure projects, the demand of a particular project are regularly laid down by the legislator in demand acts.153 The actual demand is first determined by the authorities in complex administrative procedures.154 SUPs are also carried out for this purpose. The extent to which climate protection must also be taken into account in this context and, if necessary, the effect of the Demand Act on later approval decisions will also be the subject of legal disputes. In a recent decision, the Federal Administrative Court155 argued that a road construction project could not necessarily be deemed in non-compliance with transport sector reduction targets and thus climate change considerations might not yet be operative. This judgement however predates the adoption of the KSG.

4. Actions for adjustment and compensation 101

Actions for adaptation and compensation relate in particular to cases where sufficient climate protection measures are not effectively implemented and there is a permanent material loss of property, life or physical integrity. Given the variety of NGOs in Germany that hold land for nature protection purposes it is not a wide stretch to envision legal disputes about the type or extent of adaptation measures adopted and implemented. Also, naturally, adaptation measures will often themselves represent projects which offer direct access to judicial review for EAA.

VI. Conclusion 102

As this paper shows, climate litigation is a growing field and NGOs will continue to play an important role. There is no finite analysis, but the subject itself (NGOs) largely 149 Decision available: https://www.judiciary.uk/judgments/r-friends-of-the-earth-v-secretary-of-statefor-transport-and-others/. 150 Summary of judgements, 4, available: https://www.judiciary.uk/wp-content/uploads/2020/02/Heathrow-summary-of-judgments-26-February-2020-online-version.pdf. 151 Explicitly recitals 7, 13 of Directive 2014/52/EU. 152 See Annex 4 No. 4 c) UVPG; in-depth: Balla/Borkenhagen/Günnewig, ZUR 2019, 323. 153 E.g. Federal Demand Plan Act (Bundesbedarfsplangesetz) § 12e Energy Industries Act (EnWG) for the development of national grid extension on the federal level. 154 E.g. network development plan, § 12c EnWG. 155 BVerwG, judgement of 11.7.2019, 9 A 13/18, juris, mn. 75.

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Y. The role of non-governmental organizations for climate change litigation

determines the case law and jurisprudence. One obvious conclusion however is that the current development of access to justice in procedural law is not finite. This relates to the differentiation between EU and national law on the one hand, but also the subject matter of possible reviews under the EAA. Finally, it remains to be seen how the German practice will fare under the scrutiny of the Aarhus Convention’s Compliance Committee.

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PART 6 CONCLUSIONS LIABILITY FOR CLIMATE DAMAGES – SYNTHESIS AND FUTURE PROSPECTS Bibliography: Ahrens, Außervertragliche Haftung wegen der Emission genehmigter Treibhausgase?, VersR 2019, 645 et seq.; Albrecht, Die Stadt im Klimawandel: Handlungsfelder, Rechtsinstrumente und Perspektiven der Anpassung (climate resilient cities), ZUR 2020, 12 et seq.; Beckbissinger, Umweltschadensgesetz – Klimaschutz und Verursacherprinzip, EurUP 2020, 2 et seq.; Bickenbach, Subjektivöffentliches Recht auf Klimaschutz? Die Erderwärmung vor Gerichten, JZ 2020, 168 et seq.; Boskovic, Brèves remarques sur le devoir de vigilance et le droit international privé, Recueil Dalloz 2016, 385 et seq.; Boysen, Entgrenzt – pluralistisch – reflexiv – polyzentrisch – kontestiert: Das Transnationale am transnationalen Klimaschutzrecht, ZUR 2018, 643 et seq.; Brabant/Michon/Savourey, Le plan de vigilance, Revue international de la compliance et de l’éthique des affaires 93 (2017), 26 et seq.; Bundesministerium für Umwelt, Naturschutz und nukleare Sicherheit, Klimaschutz in Zahlen, 2018; Calliess, Abstand halten: Rechtspflichten der Klimaschutzpolitik aus planetaren Grenzen, ZUR 2019, 385 et seq.; Chatzinerantzis/ Appel, Haftung für den Klimawandel, NJW 2019, 881 et seq.; Clark, The Paris Agreement: Its Role in International Law and American Jurisprudence, Notre Dame Journal of International & Comparative Law 8, 2018, 107 et seq.; Cournil/Le Dylio/Mogeolle, L’affaire du Siècle: French Climate Litigation between Continuity and Legal Innovations, CCLR 2020, 40 et seq.; Cremer, Verfassungskräftiger Klimaschutz nach Maßgabe völkerrechtlich verbindlicher Verpflichtungen und Ziele, ZUR 2019, 278 et seq.; d’Avout, L’entreprise et les conflits internationaux de lois, Recueil des cours 397 (2019), 9 et seq.; d’Avout/Bollée, Panorama de droit du commerce international (août 2016-juillet 2017), Recueil Dalloz 2017, 2054 et seq.; Der Spiegel Nr. 50 v. 7.12.2019, 108 et seq. (“Planetare Notlage”); Dilling/Markus, The Transnationalisation of Environmental Law, Journal of Environmental Law 30, 2018, 179 et seq.; Ehemann, Eva-Maria, Umweltgerechtigkeit, 2020; Faure, Die Effektivität des Umweltrechts im Zeichen des Klimawandels, ZUR 2020, 141 et seq.; Fischer, Grundlagen und Grundstrukturen eines Klimawandelanpassungsrechts, 2013; Fisher, Challenges für the EU Climate Change Regime, GLJ 2020, 5 et seq.; Fleischer/Danninger, Konzernhaftung für Menschenrechtsverletzungen, DB 2017, 2849 et seq.; Frank, Klimahaftung und Kausalität, ZUR 2013, 28 et seq.; Frank, Staatliche Klimaschutzpflichten, NVwZ-Extra 22/2016, 1 et seq.; Frank, Störerhaftung für Klimaschäden?, NVwZ 2017, 664 et seq.; Frank, Zur Kausalitätsproblematik und Risikozurechnung bei Klimaschäden im Zusammenhang mit Entschädigungs- und Schutzansprüchen gemäß Völkerumweltrecht, BRJ 2015, 42 et seq.; Frank/Baldrich/Bals, in: Das Klima vor Gericht, in: Lozán et al. (eds.): Warnsignal Klima – Extremereignisse. Wissenschaftliche Auswertungen, 2018, 374 et seq.; Franzius, Das Paris-Abkommen zum Klimaschutz als umweltvölkerrechtlicher Paradigmenwechsel, EurUP 2017, 166 et seq.; Franzius, Das Paris-Abkommen zum Klimaschutz, ZUR 2017, 515 et seq.; Franzius, Klimaschutz im Anthropozän, EurUP 2019, 498 et seq.; Frenz, Klimaschutz und Menschenwürde, UPR 2020, 1 et seq.; Frenz/Overath, Das Klimapaket der Bundesregierung, UPR 2019, 479 et seq.; Gärditz, Die Entwicklung des Umweltrechts in den Jahren 2016‐2018: Rechtsschutz, Klimaschutz und Diesel in Zeiten politischer Polarisierung, ZfU 2019, 369 et seq.; Ganguly/Setzer/ Heyvaert, If at First You Don’t Succeed: Suing Corporations for Climate Change, Oxford Journal of Legal Studies 2018, 1 et seq.; Graf Kielmansegg, FAZ v. 16.9.2019, 6; Graser, Vermeintliche Fesseln der Demokratie: Warum die Klimaklagen ein vielversprechender Weg sind, ZUR 2019, 271 et seq.; Gross, Verfassungsrechtliche Klimaschutzverpflichtungen, EurUP 2019, 353 et seq.; Gross, Die Ableitung von Klimaschutzmaßnahmen aus grundrechtlichen Schutzpflichten, NVwZ 2020, 337 et seq.; Habersack/Ehrl, Verantwortlichkeit inländischer Unternehmen für Menschenrechtsverletzungen durch ausländische Zulieferer – de lege lata und de lege ferenda, AcP 219 (2019), 155 et seq.; Hahn, Umwelt- und zukunftsverträgliche Entscheidungsfindung des Staates, 2017; Hennings, Über das Verhältnis von multinationalen Unternehmen zu Menschenrechten, 2009; Hofmann, Landwirtschaft und Klimaschutz aus deutscher Sicht, NVwZ 2019, 1145 et seq.; Hutley/Hartford Davis, Climate Change and Directors’ Duties – supplementary memorandum of opinion, 26 March 2019, https://cpd.org.au/wp-content/uploads/2019/03/Noel-HutleySC-and-Sebastian-Hartford-Davis-Opinion-2019-and-2016_pdf.pdf (last consulted on 1.4.2020); IPCC, Klimaänderung 2014: Folgen, Anpassung und Verwundbarkeit. Häufig gestellte Fragen und Antworten –

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Liability for climate damages – Synthesis and future prospects Teil des Beitrags der Arbeitsgruppe II zum fünften Sachstandsbericht des zwischenstaatlichen Ausschusses für Klimaänderung, 2014; IPCC, Klimaänderung 2014: Synthesebericht. Beitrag der Arbeitsgruppen I, II und III zum Fünften Sachstandsbericht des Zwischenstaatlichen Ausschusses für Klimaänderungen, 2014; IPCC, Zusammenfassung für politische Entscheidungsträger, in: 1,5°C globale Erwärmung. Ein IPCCSonderbericht über die Folgen einer globalen Erwärmung um 1,5°C gegenüber vorindustriellem Niveau und die damit verbundenen globalen Treibhausgasemissionspfade im Zusammenhang mit einer Stärkung der weltweiten Reaktion auf die Bedrohung durch den Klimawandel, nachhaltiger Entwicklung und Anstrengungen zur Beseitigung von Armut, 2018; IPCC, Zusammenfassung für politische Entscheidungsträger, in: Klimaänderung 2014: Folgen, Anpassung und Verwundbarkeit. Beitrag der Arbeitsgruppe II zum Fünften Sachstandsbericht des Zwischenstaatlichen Ausschusses für Klimaänderungen, 2014; Kafsack, FAZ v. 4.3.2020, cited from: https://www.faz.net/-iu4-9x5kg (last consulted on 7.3.2020); Kahl, Nachhaltigkeitsverfassung, 2018; Kahl/Daebel, Climate Change Litigation in Germany. An Overview of Politics, Legislation and Especially Jurisdiction regarding Climate Protection and Climate Damages, EEELR 2019, 67 et seq.; Kahl/Gärditz, Umweltrecht, 11th ed. 2019; Kahl/Waldhoff/Walter (eds.), Bonner Kommentar zum Grundgesetz, 2020.; Kaleck/Saage-Maaß, Unternehmen vor Gericht, Wagenbach 2016; Keller/Kapoor, Climate Change Litigation – zivilrechtliche Haftung für Treibhausgasemissionen, BB 2019, 706 et seq.; Kern, Private Law Enforcement versus Public Law Enforcement, ZZPInt 12 (2007), 351 et seq.; Kersten, Das Anthropozän-Konzept, 2014; Kessedjian, Implementing the UN Principles on Business and Human Rights in Private International Law: European Perspectives, in: Cabot/Urscheler/De Dycker (eds.), Implementing the UN Principles on Business and Human Rights, Schulthess 2017, 141 et seq.; Klein/ Carazo/Doelle/Bulmer/Higham, The Paris Agreement on Climate Change, 2017; Kling, Die Klimaklage gegen RWE, KJ 2018, 213 et seq.; Klinger/Krajewski/Krebs/Hartmann, Verankerung menschenrechtlicher Sorgfaltspflichten im deutschen Recht, 2016; Kloepfer/Mast, Das Umweltrecht des Auslandes, 1995; Köck, Klimaklage des Peruaners Lliuya gegen RWE abgewiesen, ZUR 2017, 373 et seq.; Kohler/Puffer-Mariette, EuGH und Privatrecht – Ein Rückblick nach 60 Jahren, ZEuP 2014, 696 et seq.; Konrad-AdenauerStiftung e.V., Der Klimaschutz führt ein verfassungsrechtliches Schattendasein, 2019; Kosa, Das Übereinkommen von Paris zum Klimaschutz: Einbindung und Rolle nicht-staatlicher Akteure, EurUP 2020, 17 et seq.; Krämer, Climate Cases before the European Courts, JEEPL 2019, 198 et seq.; Lehmann/Eichel, Globaler Klimawandel und Internationales Privatrecht, RabelsZ 83 (2019), 77 et seq.; Les Amis de la Terre France/Survie, Manquements graves à la loi sur le devoir de vigilance: Le cas TOTAL en Ouganda, available at https://www.totalautribunal.org/ (last consulted on 1.4.2020); Lübbe-Wolff, Instrumente des Umweltrechts – Leistungsfähigkeit und Leistungsgrenzen, NVwZ 2001, 481 et seq.; Mansel, Internationales Privatrecht de lege lata wie de lege ferenda und Menschenrechtsverantwortlichkeit deutscher Unternehmen, ZGR 2018, 439 et seq.; Mathis, Nachhaltige Entwicklung und Generationengerechtigkeit, 2017; Mayer, Interpreting States’ general obligations on climate change mitigation: A methodological review, RECIEL 28 (2019), 107 et seq.; Meyer, Grundrechtsschutz in Sachen Klimawandel?, NJW 2020, 894 et seq.; Minnerop, Integrating the ‘duty of care’ under the European Convention on Human Rights and the science and law of climate change: the decision of The Hague Court of Appel in the Urgenda Case, Journal of Energy & Natural Resources Law 37, 2019, 149 et seq.; Muir Watt, Compétence du juge anglais en matière de responsabilité de la société mère pour les dommages causés par sa filiale à l’étranger (Court of Appeal (Royaume-Uni), 13 octobre 2017, EWCA Civ. 1528), Revue critique de droit international privé 2017, 613 et seq.; Muir Watt, La saga juridictionnelle Vedanta (suite): le devoir de vigilance de la société-mère à l’égard des tiers (Cour suprême du Royaume-Uni, 10 avr. 2019, [2019] UKSC 20), Revue critique de droit international privé 2019, 504 et seq.; Nasse, Devoir de vigilance – Die neue Sorgfaltspflicht zur Menschenrechtsverantwortung für Großunternehmen in Frankreich, ZEuP 2019, 773 et seq.; Pataut, Le devoir de vigilance – Aspects de droit international privé, Droit social 2017, 833 et seq.; Payandeh, Deliktische Haftung von Unternehmen für transnationale Menschenrechtsverletzungen, in: Boele-Woelki/Faust/Jacobs/Kuntz/Röthel/Thorn/Weitemeyer (eds.), Festschrift für Karsten Schmidt zum 80. Geburtstag, Vol. 2, 2019, 131 et seq.; Peel/Lin, Transnational Climate Litigation: The Contribution of the Global South, The American Journal of International Law 113, 2019, 679 et seq.; Peel/Osofsky, A Rights Turn in Climate Change Litigation?, Transnational Environmental Law 7:1, 2018, 37 et seq.; Pöttker, Klimahaftungsrecht, 2014; Preston, Climate Change Litigation, A paper presented to: Judicial Conference of Australia Colloquium, 11 October 2008, 2 et seq.; http://www.lec.justice.nsw.gov.au/Documents/preston_climate%20change%20litigation%202008.pdf (last consulted on 1.4.2020); Proelss, Europäische Energieunion und internationaler Klimaschutz, in: Gundel/Lange (eds.), Europäisches Energierecht zwischen Klimaschutz und Binnenmarkt, 2020, 1 et seq.; Rajamani, The 2015 Paris Agreement: Interplay between Hard, Soft and Non-Obligations, Journal of Environmental Law 28, 2016, 337 et seq.; Rosso Grossman, Climate Change and the Individual, The American Journal of Comparative Law 66, 2018, 345 et seq.; Rumpf, Der Klimawandel als zunehmendes Haftungsrisiko für “Carbon Majors”, EurUP 2019, 145 et seq.; Saurer, Verfahrensregeln im internationalen Klimaschutzrecht NuR 2019, 145 et seq.; Saurer, Perspektiven eines Bundes-Klimaschutzgesetzes, NuR 2018, 581 et seq.; Saurer, Strukturen gerichtlicher Kontrolle im Klimaschutzrecht – Eine rechtsvergleichende Analyse, ZUR 2018, 679 et seq.;

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Part 6. Conclusions Saurer, Verfahrensregeln im internationalen Klimaschutzrecht, NuR 2019, 145 et seq.; Saurer/Purnhagen, Klimawandel vor Gericht – Der Rechtsstreit der Nichtregierungsorganisation “Urgenda” gegen die Niederlande und seine Bedeutung für Deutschland, ZUR 2016, 16 et seq.; Schomerus, Entscheidungsbesprechung – Urteil des VG Berlin vom 31.10.2019, VG 10 K 412.18, ZUR 2020, 167 et seq.; Smith, Landmark climate change-related judicial decisions handed down in the Netherlands and Australia: a preview of what’s to come?, Journal of Energy & Natural Resources Law 37, 2019, 145 et seq.; Spier, ‘There is no future without addressing climate change’, Journal of Energy & Natural Resources Law 37, 2019, 181 et seq.; Spiesshofer, Die Transnationalisierung des Klimaschutzrechts, AVR 57 (2019), 26 et seq.; Spindler, Unternehmensorganisationspflichten, 2nd ed., 2011; Streck, Filling in for Governments? The Role of the Private Actors in the International Climate Regime, JEEPL 2020, 5 et seq.; Streck/v. Unger/Krämer, From Paris to Katowice: COP-24 Tackles the Paris Rulebook, JEEPL 2019, 165 et seq.; United Nations Environment Programme, The Status of Climate Change Litigation: A Global Overview, 2017; v. Oppen, Klimaschutzgesetz, Kohleausstieg und nationaler Emissionshandel, ER 2020, 3 et seq.; Verheyen/Lührs, Klimaschutz durch Gerichte in den USA – 2. Teil: Zivilrecht, ZUR 2009, 129 et seq.; Voland, Zur Reichweite von Menschenrechten im Klimaschutz, NVwZ 2019, 114 et seq.; Voland/Engel, Regeln für das Weltklima, NVwZ 2019, 1785 et seq.; Wagner, Haftung für Menschenrechtsverletzungen, RabelsZ 80 (2016), 717 et seq.; Wagner, Gerhard, Klimahaftung vor Gericht, 2020; Wegener, Urgenda – Weltrettung per Gerichtsbeschluss?, ZUR 2019, 3 et seq.; Weller/Nasse, Menschenrechtsarbitrage als Gefahrenquelle – Systemkohärenz einer Verkehrspflicht zur Menschenrechtssicherung in Lieferketten?, ZGR-Sonderheft 1/ 2020; Weller/Nasse/Nasse, Klimaklagen gegen Unternehmen im Licht des IPR, in: Benicke/Huber (eds.), Festschrift Kronke, 2020, 601 et seq.; Weller/Thomale, Menschenrechtsklagen gegen deutsche Unternehmen, ZGR 2017, 509 et seq.; Weller/Kaller/Schulz, Haftung deutscher Unternehmen für Menschenrechtsverletzungen im Ausland, AcP 216 (2016), 387 et seq.; Winter, Armando Carvalho et alii versus Europäische Union: Rechtsdogmatische und staatstheoretische Probleme einer Klimaklage vor dem Europäischen Gericht, ZUR 2019, 259 et seq.; Winter, Rechtsprobleme im Anthropozän, ZUR 2017, 267 et seq.; Wissenschaftliche Dienste des Deutschen Bundestages, Rechtliche Grundlagen und Möglichkeiten für Klima-Klagen gegen Staat und Unternehmen in Deutschland, WD 7–3000 – 116/16, 2016; Wissenschaftlicher Beirat der Bundesregierung für Globale Umweltveränderungen (WBGU), Welt im Wandel – Gesellschaftsvertrag für eine Große Transformation, 2011; WWF, Klimaschutzgesetze in Europa, 2019; Zengerling, Städte im polyzentrischen Klimaschutzregime – Verantwortung ohne Rechtsverbindlichkeit, ZUR 2020, 3 et seq.; Ziehm, Klimaschutz im Mehrebenensystem, ZUR 2018, 339 et seq.

Contents I. Introduction ..................................................................................................... II. Fundamental questions.................................................................................. 1. Sustainability and environmental justice .............................................. 2. Polluter-pays principle .............................................................................. 3. The role of the legislature and the judiciary ........................................ 4. Duties of protection ................................................................................... III. Procedural issues and Conflict of Laws ..................................................... 1. Procedures before civil courts.................................................................. 2. Applicable law ............................................................................................. 3. Arbitration proceedings ............................................................................ IV. State liability under international and European law............................. V. Climate change litigation: country reports ............................................... 1. USA................................................................................................................ 2. Canada .......................................................................................................... 3. Brazil.............................................................................................................. 4. Australia........................................................................................................ 5. United Kingdom ......................................................................................... 6. Italy ................................................................................................................ 7. France............................................................................................................ 8. Netherlands.................................................................................................. VI. Liability for climate damages – Germany as an international pioneer? ............................................................................................................. 1. Environmental Damage Act..................................................................... 2. Role of the NGOs ....................................................................................... 3. Corporate climate responsibility ............................................................. 4. Delictual climate change liability ............................................................

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Liability for climate damages – Synthesis and future prospects VII. Tendencies and prospects ............................................................................. 1. Primacy of the legislature, supplemental function of the courts..... 2. Basic right or state objective: climate protection in the national constitutions?............................................................................................... 3. Emission reduction objectives in the constitution? ............................ 4. Private enforcement ................................................................................... a) Leverage................................................................................................... b) Complementary function .................................................................... c) Strategic litigation ................................................................................. d) Bases of liability under substantive law ........................................... aa) Causality/imputability ................................................................... bb) Unlawfulness/breach of a duty of care towards third parties e) Corporate climate responsibility........................................................ 5. Conclusion ...................................................................................................

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I. Introduction Many scholars view the third decade of the 21st century as the decade in which 1 global climate protection must be decisively advanced, in order to limit global warming to at least 2°C, or better yet to 1.5°C, when compared to the pre-industrial level.1 To do so, expert opinion holds that it is necessary to reduce global greenhouse gas emissions by at least 50 % by 2050 and by 80‐90 % by 2100. Within the EU, the objective is to reduce greenhouse gas emissions by 40 % by 2030, compared to 1990.2 By 2050, EU-wide greenhouse gas emission is supposed to be reduced by 80‐95 %, compared to 1990. In order to reach these reduction objectives and emerge from the “planetary state of 2 emergency”,3 fundamental and drastic changes are needed, in particular in the sectors of energy, industry, transport, construction, and agriculture. Therefore, climate protection – together with the protection of biodiversity4 (both objectives are closely linked) – is the 1 Thus, the duty on the basis of the Paris Agreement from 12.12.2015, concluded in the framework of the United Nations Framework Convention on Climate Change (UNFCCC), which was ratified by 197 states (OJ EU L 282/5), on this Voigt, mn. 3. In detail on the Paris Agreement and the UN Climate Conference COP24 in Katowice Franzius/Kling, mns 1 et seq. Furthermore Clark, Notre Dame Journal of International & Comparative Law 8, 2018, 107 et seq.; Streck/v. Unger/Krämer, JEEPL 2019, 165 et seq.; Voland/Engel, NVwZ 2019, 1785 et seq.; Rajamani, Journal of Environmental Law 28, 2016, 337 et seq.; Franzius, EurUP 2017, 166 et seq.; Franzius, ZUR 2017, 515 et seq.; Klein/Carazo/Doelle/Bulmer/ Higham, The Paris Agreement on Climate Change, 2017; Saurer, NuR 2019, 145 et seq., and on the concept of planetary limits that underlie the 2 and 1.5°C objectives Calliess, ZUR 2019, 385 et seq. A vivid discussion of humanity’s “soon-to-be-exhausted ‘carbon budget’” in Hofmann, NVwZ 2019, 1145. 2 Meeting of the European Council (23./24.10.2014), Conclusions on Climate and Energy Policy Framework, SN 79/14. Currently, under its new President of the Commission v. der Leyen, the EU is working on advancing its climate change policy (“Green Deal”), although the concrete steps taken thus far remain too cautious, in the view of climate activists, cf Kafsack, in: FAZ from 4.3.2020, cited from: https://www.faz.net/-iu4-9x5kg (last consulted on 7.3.2020). Cf on the current climate protection goals at the international, European, and German level also the overview in German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (Bundesministerium für Umwelt, Naturschutz und nukleare Sicherheit), Klimaschutz in Zahlen, 2018. Generally on the relationship of competition and convergence between European and global climate change policy Proelss, in: Gundel/Lange (ed.), Europäisches Energierecht zwischen Klimaschutz und Binnenmarkt, 2020, 1 (19 et seq.). 3 Cf on this Der Spiegel Nr. 50 v. 7.12.2019, 108 et seq. 4 According to the WWF, the earth is currently experiencing the greatest extinction of species since the extinction of the dinosaurs, and that only marks the beginning of this development, https://www.spiegel. de/wissenschaft/natur/tierschutz-wwf-warnt-vor-groessten-artensterben-seit-verschwinden-der-dinosaurier-a-1302823.html (last consulted on 7.3.2020).

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Part 6. Conclusions

global challenge in the Anthropocene,5 which can only be handled by the community of states in the political multi-level system, in other words, inter- and transnationally.6 But this must not prevent the individual states from beginning with model measures “on their own doorstep”, that is to say, locally, regionally, and nationally.7 3 Yet despite first successes in the battle against the temperature rise and with climate change adaptation,8 the political measures still clearly take too long and lack far too much ambition to bring about a fundamental political transformation9 of the economic and energy system. It will therefore still take decades before there are no greenhouse gas emissions anymore globally and climate change is stopped. Until then, climate change will cause much more damage. The median temperature in most land and ocean areas will continue to increase. There will be increased heat extremes in most populated regions as well as heavy precipitation. The probability of drought and precipitation deficits will increase as well.10 These (and other) climate changes have numerous negative effects in turn, so that, for instance, water resources will become scarce in some regions, more species will go extinct, ecosystems will change, certain regions will no longer be inhabitable or at least not cultivable, and not least, climate change will also lead to severe damage to health and increased mortality for humans.11 Consequently, this is a key question of generational equality12 and fair ecological distribution.13 At the same time, human dignity is at stake, since the economic and ecological subsistence level of people living in the future, as a prerequisite for their subject quality (autonomous self-development), is threatened.14 4 In light of this fact, a heated debate has emerged globally in legal scholarship on who is liable for the damages (jointly) caused by climate change and by what means, before which courts, and with what prospects of success such compensation claims, should they exist, could be asserted (“climate change litigation”).15 Since, as mentioned above, 5 On this Franzius, EurUP 2019, 498 et seq.; generally Kersten, Das Anthropozän-Konzept, 2014; Winter, ZUR 2017, 267 et seq. 6 Voigt, mn. 6. Cf also Fisher, GLJ 2020, 5 et seq.; Ziehm, ZUR 2018, 339 et seq. 7 For instance, Germany has obligated itself in the Federal Climate Change Act of 12.12.2019 (Federal Law Gazette I S. 2513) to gradually reduce its greenhouse gas emissions by 2030 by at least 55 % compared to 1990. Cf on this Frenz/Overath, UPR 2019, 479 et seq.; v. Oppen, ER 2020, 3 et seq.; Saurer, NuR 2018, 581 et seq. On the climate protection laws in other European states, see the comparative overview in WWF, Klimaschutzgesetze in Europa, 2019. 8 Cf Fischer, Grundlagen und Grundstrukturen eines Klimawandelanpassungsrechts, 2013. 9 Rightly on the need for this, German Advisory Council on Global Change (Wissenschaftlicher Beirat der Bundesregierung für Globale Umweltveränderungen, WBGU), Welt im Wandel – Gesellschaftsvertrag für eine Große Transformation, 2011. 10 IPCC, Summary for Policymakers, 2018, in: Global Warming of 1.5 ºC: An IPCC special report on the impacts of global warming of 1.5 °C above pre-industrial levels and related global greenhouse gas emission pathways, in the context of strengthening the global response to the threat of climate change, sustainable development, and efforts to eradicate poverty, B.1.; IPCC, 2014: Climate Change 2014: Synthesis Report. Contribution of Working Groups I, II and III to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change, 2.2.; IPCC: Summary for Policymakers, 2014, in: Climate Change 2014: Impacts, Adaptation, and Vulnerability. Working Group II Contribution to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change, A.1. 11 IPCC, 2014: Climate Change 2014: Impacts, Adaptation, and Vulnerability. Working Group II Contribution to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change, FAQ 3.2, 4.4, 4.5, 11.1. 12 Fundamentally Mathis, Nachhaltige Entwicklung und Generationengerechtigkeit, 2017. 13 Fundamentally Ehemann, Umweltgerechtigkeit, 2020; Hahn, Umwelt- und zukunftsverträgliche Entscheidungsfindung des Staates, 2017. 14 Cf Frenz, UPR 2020, 1 (1 et seq., 4 et seq.). 15 Cf only representatively for Germany Kahl/Daebel, EEELR 201, 67 et seq.; Wagner, Klimahaftung vor Gericht, 2020; Wissenschaftliche Dienste des Deutschen Bundestages, Rechtliche Grundlagen und Möglichkeiten für Klima-Klagen gegen Staat und Unternehmen in Deutschland, WD 7–3000 – 116/16,

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legislatures worldwide are not yet active enough regarding effective measures against climate change, citizens and interest groups are increasingly “taking up the gauntlet” across the globe and – actively and/or ideationally supported by environmental protection associations (NGOs) as well as by global protest movements (“Fridays for Future”) – advocating in court a more effective climate protection legislation or for compensation for the damages they have suffered.16 In first climate actions, some of which have already been successful, the courts have begun to shape the new legal field of “climate damage liability”, which is still in the making.17 Yet many legal questions remain open and undecided, debated among lawyers as well,18 for they bring up fundamental questions of democracy and the separation of powers19. But this much is certain: globally, “climate change litigation” is a central topic, treated with equal intensity in scholarship and in practice (lawyers, courts, companies, NGOs). What is more, climate change litigation will surely – unfortunately – have a “great” future, much like the subject it involves, namely the damage caused by climate change. The present volume aims to contribute to treating the related legal issues, by focusing specifically on the perspectives of international and comparative law and analysing how the community of states as a whole can benefit from the – positive and negative – experiences of individual states with handling the damaging effects of climate change. The legal problems discussed in connection with climate damage liability are diverse 5 and range from fundamental questions, which are relevant for all legal orders, to international and European issues, to national specificities. This volume has attempted to encompass all of these topics and to interlink them. In the process, many facts, insights, and conclusions have emerged, which, in their range and diversity, cannot be presented here in any comprehensive way. Instead, the final contribution is limited to taking up some especially important conclusions from the individual contributions and summarizing them, for one, but also, for another, interlinking them with a view to the future.

II. Fundamental questions 1. Sustainability and environmental justice Kloepfer and Neugärtner understand “sustainability” and “environmental justice” as 6 framework conditions for evaluating environmental and climate decisions, whose different emphases complement each other: Sustainability emphasizes “time”, while environmental justice focuses on “space”.20 Yet both framework conditions concentrate on the question of justice for humans in the environment, not of justice towards nature. Their traditionally strongly anthropocentric and instrumental emphasis therefore makes them “by and large […] ignorant of and blind to non-human interests”.21 The question of justice towards nature can be better evaluated with the help of “ecological justice” as an additional framework condition. It is especially aware of “strange agents”, such as 2016; for the USA Rosso Grossman, American Journal of Comparative Law 66, 2018, 345 et seq. and for France Cournil/Le Dylio/Mougeolle, CCLR 2020, 40 et seq. 16 Cf the overviews in Wegener, ZUR 2019, 3 et seq.; Meyer, NJW 2002, 894. 17 Cf as one example G. Wagner, Klimahaftung vor Gericht, 2020. 18 Critically for ex. Wegener (fn. 16), who fears a threat to parliamentary democracy and the division of powers. Similarly also Gärditz, ZfU 2019, 369 (382 et seq.). Favorably by contrast Graser, ZUR 2019, 271 et seq. 19 Often thematised in the literature under the keyword of the “danger of an eco-dictatorship”, cf Graf Kielmansegg, in: FAZ v. 16.9.2019, 6. 20 Kloepfer/Neugärtner, mns 13 et seq., 16 et seq. 21 Kloepfer/Neugärtner, mn. 24.

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greenhouse gases.22 With the help of these framework conditions, problems such as the temporal divergence of the causation of greenhouse gas emission and the time of damage (“time”), the spatial divergence of causation and the place of damage (“space”), and the requirement of adequate causation (greenhouse gases as “strange agents”) can be better understood and evaluated.

2. Polluter-pays principle 7

One of the central problems in climate liability procedures is identifying a responsible party. The polluter-pays principle, which Rehbinder analyzes and which is recognized as a legal principle in many legal orders today, is crucial in this respect.23 Materially, the issue at stake is attributing the costs of pollution or of measures to prevent pollution. The costs are redistributed from the (potential) victims of environmental damages or the state (the general public) to the polluter and thus – in the language of environmental economy – no longer “externalized” but “internalized”.24 However, determining the polluter creates complex problems. Causality is an essential requirement for establishing responsibility.25 Climate liability law deals with global geographically remote damages (Distanzschäden) and cumulatively caused damages (Summationsschäden).26 Consequently, the proof of causality between an activity that leads to climate change and a concrete damage in Rehbinder’s view raises considerable, perhaps even insurmountable problems.27 This touches a sore spot at the heart of climate change litigation. Many other authors in this volume follow suit and also illuminate questions of causality from their particular perspective.

3. The role of the legislature and the judiciary 8

Payandeh‘s contribution addresses another fundamental question by examining the courts’ role in climate protection and the separation of powers. Legal disputes in connection with climate change are very diverse. They can be carried out before different international, national, and regional courts; they concern different parties and actors and pursue entirely disparate goals.28 At the international level, primarily the International Court of Justice would have jurisdiction.29 But to date, it has not taken any decision directly concerning climate change.30 The same applies to the European Court of Human Rights, which has however already developed comprehensive jurisprudence on the effects of environmental damages on human rights.31 22

Kloepfer/Neugärtner, mns 25 et seq. Rehbinder, mns 5 et seq. 24 Rehbinder, mn. 23. 25 Rehbinder, mn. 33. 26 Cf on this issue generally Lübbe-Wolff, NVwZ 2001, 481 (485 et seq.). 27 Rehbinder, mn. 42. 28 Payandeh, mn. 4. 29 Payandeh, mn. 5. 30 However, the ICJ discusses environmental issues in several judgments, cf Gabcikovo-Nagumaros Project (Hung. v. Slovk.), 1997 I.C.J. 3 (Order of Feb. 5), para. 53: “The existence of the general obligation of States to ensure that activities within their jurisdiction and control respect the environment of other States or of areas beyond national control is now part of the corpus of international law relating to the environment”. This idea was later applied in the Pulp Mills case, cf Pulp Mills on the River Uruguay (Argentina v. Uruguay), Provisional Measures, Order of 13 July 2006, I.C.J. Reports 2006, 113, para. 204: “In this sense, the obligation to protect and preserve, under Article 41 (a) of the Statute, has to be interpreted in accordance with a practice, which in recent years has gained so much acceptance among States that it may now be considered a requirement under general international law to undertake an environmental impact assessment where there is a risk that the proposed industrial activity may have a significant adverse impact in a transboundary context, in particular, on a shared resource.” 31 Payandeh, mn. 6. 23

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To date, the majority of court decisions dealing with climate change have been issued 9 by national courts. The possible litigational objectives are manifold. Actions can aim, first, to force the authorities to take more effective measures to reduce emissions32 or, secondly, to force the administrative agencies to take climate change concerns into account or accord them greater importance.33 Thirdly, it is possible to bring actions to reduce greenhouse gas emissions directly against the emitting companies.34 Another group of actions aims to cope with the effects of climate change.35 Finally, there are legal disputes concerning the compensation of damages that have resulted from climate change.36

4. Duties of protection Gross’ contribution attends to the importance of basic rights in their capacity as 10 climate-related duties of protection. He concentrates on the legal situation in Europe, where there is already a common understanding upon which to build – also in the area of environmental protection.37 Only very few constitutions worldwide contain special provisions on climate change. In these cases, constitutional duties to fight climate change can only be derived from general environmental protection clauses or from human rights.38 Since the constitutional provisions to protect the environment often cannot be claimed in court, human rights are extremely important in actions that aim to take measures against climate change.39 These protect not only from state measures restricting the freedom of the individual but also impose the duty on the state to prevent human rights violations by other human actors or natural catastrophes.40 So far, the courts have passed rather restrained judgments. First of all, as a rule, there 11 are already considerable admissibility hurdles to overcome: where a constitutional complaint to the Federal Constitutional Court in Germany is concerned, these hurdles involve, in particular, substantiating the fundamental rights violation as a result of alleged legislative omission as well as attributing effects in the case of global geographically remote damages (Distanzschäden) and cumulatively caused damages (Summationsschäden), in addition to exhausting all legal remedies.41 For example, the EU General Court (EGC) has rejected individual plaintiffs’ actions for annulment against various legal acts of the EU as inadmissible, because the plaintiffs were not individually affected (art. 263 para. 4 TFEU).42 In cases in which the admissibility hurdle was cleared, the majority of courts so far have dismissed human rights violations in connection with climate change at the merits level.43 Nevertheless, these decisions carry great ideational weight. The actions spur public debate and can influence political activity in the state concerned and beyond its borders, even if they are dismissed.44 32

Payandeh, mn. 11. Payandeh, mn. 12. 34 Payandeh, mn. 13. 35 Payandeh, mn. 14. 36 Payandeh, mn. 15. 37 Gross, mn. 5. 38 Gross, mn. 6. 39 Gross, mn. 11. 40 Gross, mn. 11. 41 Gärditz (fn. 18), 384. 42 EU General Court Case T-330/18 Carvalho et al./Parlament und Rat, ECLI:EU:T:2019:324; on this Winter, ZUR 2019, 259 et seq. Against the General Court’s judgment, an appeal was lodged with the ECJ, cf Az. C‐565/19 P. Generally on actions related to climate protection before the EU General Court, cf the overview in Krämer, JEEPL 2019, 198 et seq. with further references. 43 Gross, mn. 58. 44 Gross, mn. 59. 33

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III. Procedural issues and Conflict of Laws 1. Procedures before civil courts Climate change actions before the civil courts are of comparable ideational importance. Those affected by already apparent climate change effects thus attempt to eliminate impairments of their property and other rights by private parties (jointly) responsible for climate change. Non-governmental organizations, which often offer support, simultaneously aim to motivate the political actors to take action and to change the mindset of the general public (strategic litigation).45 13 Because climate change is a global phenomenon, the circumstances underlying these actions refer to the law of multiple states.46 Before a court can adjudicate the merits, it must therefore first clarify whether it has international jurisdiction in the matter and what substantive law applies to the case.47 Kieninger‘s contribution is dedicated to these questions of private international law in the broader sense. The country report on Germany by Weller/Nasse/Nasse also deals with these issues. 14 The principle of state immunity automatically rules out claims under private law against foreign states, for example to force them to take climate-protecting measures.48 But this does not apply in matters involving the extraction or processing of fossil fuels by a foreign state or state-owned enterprise, since this constitutes a (private) economic activity.49 15 According to the Brussels Ibis Regulation, the courts of the European Member States have international jurisdiction for actions against a legal entity at the registered seat, the administrative seat, or the seat of headquarters.50 For tortious acts, the plaintiff may also choose courts based on their jurisdiction of the place of conduct or the place of damage.51 Parties (jointly) responsible for climate change are thus at risk of being sued in potentially any place worldwide for damages caused by the emission of greenhouse gases and the resulting global effects of climate change.52 But neither Kieninger nor Weller and Nasse consider it necessary to correct this jurisdiction rule in favour of the emitter.53 The Brussels Ibis Regulation also allows for bringing joint action against a parent company and its subsidiaries, provided that the seat of the latter is in another EU Member State.54 If the subsidiary has its seat in a third state, it depends on the national rules of jurisdiction of the court seized.55 Actions in the USA against emitters established there also fall within the jurisdiction of the courts at the seat or at the place of headquarters, according to the US principles of jurisdiction.56 Actions brought by foreign plaintiffs in particular, regarding damages that occurred abroad, are likely to fail due to the doctrine of forum non conveniens.57 12

45

Infra VII.4.c); cf Weller/Nasse/Nasse, mn. 4. Kieninger, mns 2 et seq. 47 Kieninger, mn. 1. 48 Kieninger, mns 6 et seq. 49 Kieninger, mns 8 et seq. 50 Kieninger, mns 14 et seq.; Weller/Nasse/Nasse, mns 28 et seq. 51 Kieninger, mns 19 et seq.; Weller/Nasse/Nasse, mns 30 et seq. 52 Kieninger, mn. 20. 53 Kieninger, mns 23 et seq.; Weller/Nasse/Nasse, mns 34 et seq.; but see Lehmann/Eichel, RabelsZ 83 (2019), 77 (90 et seq.). 54 Kieninger, mns 26 et seq. 55 Kieninger, mns 28 et seq. 56 Kieninger, mns 32 et seq. 57 Kieninger, mns 38 et seq. 46

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2. Applicable law The Rome II Regulation determines the applicable law for actions before the courts of 16 an EU Member State.58 If the parties have not chosen a law, art. 7 Rome II Reg. applies to climate change litigation cases: The plaintiff can choose between the law at the place of damage and the law at the place of conduct.59 Emitters therefore potentially face liability under the law of all states in which damages occur or threaten to occur as a result of global warming.60 This can be mitigated by considering plant licenses at the level of (foreign) substantive law, although the details of this method of cognizance are disputed.61 According to US conflict-of-law rules, in principle, the applicable law is that of the place where the effect of the violation occurred. But since US Courts only apply conflict of laws when the parties plead foreign law, in practice questions of the applicable law are often not addressed in climate actions either, be it in principle or in the particular case.62

3. Arbitration proceedings In addition to proceedings before national courts, the effects of climate change will 17 also be the subject of arbitration proceedings. Lennarz’ contribution sheds light on these proceedings. But the two essential branches of climate change litigation – actions against states to obligate them to increase climate protection and reduce emissions, and actions against private emitters – will not regularly be the subject of arbitration proceedings, because of lacking relevant arbitration agreements.63 It could be different in the future for arbitration proceedings between states involved in disputes over natural resources. In the past, there have already been arbitration proceedings between states due to pollution, so that comparable proceedings for climate change are conceivable.64 By contrast, proceedings directly on the basis of international climate treaties are also not to be expected in the near future because of lacking arbitration agreements.65 But in the process of implementing these treaties, disputes between states, intergovernmental organizations, and private parties will arise indirectly, which can be settled in mixed or private arbitrations.66 Moreover, as an indirect effect of climate change, disputes between individual actors may arise from an economy increasingly oriented towards sustainability and therefore transformed, as well as from new investments for a greener economy.67

IV. State liability under international and European law Wolfrum‘s contribution deals with the issue of environmental liability in international 18 law. To date, there is no international regulation.68 Instead, there are numerous liability 58

Kieninger, mns 41 et seq.; Weller/Nasse/Nasse, mns 40. Kieninger, mns 44 et seq.; Weller/Nasse/Nasse, mns 42 et seq. 60 Kieninger, mn. 47; Weller/Nasse/Nasse mn. 53. 61 Kieninger, mns 50 et seq.; Weller/Nasse/Nasse, mns 57 et seq. 62 Kieninger, mns 60 et seq. 63 Lennarz, mns 33 et seq. 64 Lennarz, mns 40 et seq. 65 Lennarz, mns 45 et seq. 66 Lennarz, mns 56 et seq. 67 Lennarz, mns 67 et seq. 68 Wolfrum, mn. 3. 59

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regulations under private law for damages from dangerous activities with cross-border effects and regulations that concern individual sectors, such as damages in space or damages from deep seabed mining activities.69 The regulations under private law provide for the liability of the operator and so are based on the polluter-pays principle.70 Yet the individual elements’ scope of application is restricted to specific activities and certain damages. The compensation is often limited and is supplemented by contributions from a fund.71 Where the question of environmental liability under international law is concerned, for the most part, the legal problems that arise are the same as those addressed in the states. Above all, it is necessary to determine the causality between the activity creating liability and the damage for which compensation is claimed.72 Furthermore, the calculation of the amount of compensation to be paid and of the potential limits of liability may cause difficulties.73 19 Purnhagen and Saurer analyze the liability of EU Member States under EU law. The infringement procedure under art. 258‐260 TFEU is one liability mechanism for infringements against climate-related EU regulations. The imposition of financial penalties in infringement procedures is a proven tool of legal enforcement within the EU, particularly in environmental law.74 The Commission has declared its intention to use this procedure to enforce EU climate protection policies as well. 20 Beyond this, under Union-law claims of state liability established under the ECJ’s case law (the so-called Francovich doctrine), the Member States may be liable for neglecting to take measures to fight climate change. The Court names three requirements that must be fulfilled to establish a Member State’s liability. First, the violated rule of law must aim to grant the individual party rights. Secondly, the injury must be sufficiently serious. Thirdly, there must be a causal connection between the state’s violation of its duty and the damage.75 While it is certainly possible to establish the first two requirements in climate liability cases in the individual case in Purnhagen and Saurer’s view,76 the causality between the state’s violation of its duty and the damage is the most problematic requirement. The damage is difficult to estimate. Moreover, the evidence of direct causality is very difficult to provide, if one considers it necessary, as for environmental effects, to weigh this against other criteria, for example the effects on global competition or on individual property rights.77 21 With the help of the Francovich criteria, infringements against the EU climate protection regulations thus do not generally fall within the scope of state liability under EU law. Purnhagen and Saurer ultimately consider it difficult to apply another measure in climate law, since the liability for omitted climate protection measures is not a general liability principle common to all Member States. However, they argue that the existence of such a shared liability principle is the fundamental prerequisite for the applicability of the EU Member States’ non-contractual liability.78

69

Wolfrum, mn. 4. Wolfrum, mn. 23. 71 Wolfrum, mn. 23. 72 Wolfrum, mn. 48. A detailed analysis of the problem of causality in international environmental law in Frank, BRJ 2015, 42 et seq. 73 Wolfrum, mn. 54. 74 Purnhagen/Saurer, mns 20 et seq. 75 Purnhagen/Saurer, mns 34 et seq. 76 Purnhagen/Saurer, mns 50 et seq. 77 Purnhagen/Saurer, mns 55 et seq. 78 Purnhagen/Saurer, mns 58 et seq., 61. 70

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V. Climate change litigation: country reports 1. USA With 700 to 800 proceedings to date, the USA is the pioneer of climate-induced legal 22 disputes.79 As Farber states in his country report, the great majority pertains to the judicial review of actions by administrative authorities.80 But increasingly, plaintiffs also bring actions against individual companies by way of private enforcement. Until now, these actions were rejected as inadmissible. Many courts contend that unlike the “political powers”, that is, the legislative and executive power, they are not competent to answer the questions raised by climate liability cases (the so-called political question doctrine).81 Others do not grant the plaintiffs legal standing.82 To have standing, the plaintiff must cumulatively prove that (1.) his or her interests were in fact injured (injury-in-fact), (2.) the injury can be traced back to the plaintiff (traceability), and (3.) a decision granting the application would offer at least partial legal redress (redressability).83 In Comer v. Murphy Oil USA, for instance, the appellate court denied the traceability 23 between the emissions caused by the defendant company and the damages caused by Hurricane Katrina.84 But the other two elements of standing raise questions as well: Is it sufficient for a violation of interests that the contested emissions have only a hardly measurable influence on global warming, an influence that may lie in the far future? Would the plaintiff’s injury be demonstrably redressed if the court admitted the claim and as a result prevented the contested emissions?85 The action for negligence and the legal institution of the public nuisance in particular 24 can be considered as bases for liability under substantive law.86 To establish liability according to the action for negligence, the plaintiff must prove that the defendant has breached a duty of care that existed vis-à-vis the plaintiff, that the plaintiff has suffered a violation of a legal good as a result and so incurred a damage.87 The reasons given for the emitting company’s duty towards the plaintiff to reduce emissions cannot simply be readily accepted. For these reasons must fully consider how severe the impending injury of the legal interest is, how predictable and likely it is that the concrete damage will occur, and whether the emissions are avoidable, taking economic aspects and the common interest in long-term energy supplies into account.88 Furthermore, as already in the context of standing, it is disputed whether a sufficient causal link exists between the suffered or impending damage and the company’s emission. Direct causation is not required.89 A multi-level causal link between the emission and the damage suffices, provided the injury would not have occurred without the conduct of the defendant party that potentially establishes liability (so-called but-for test).90 Yet proving that anthropo79

Farber, mn. 1. Farber, mn. 2. 81 Cf People of the State of California v. General Motors Corp., 2007 WL 2726871 (N.D. Cal. 2007); Connecticut v. American Electric Power Co., Inc., 406 F. Supp. 2d 265, 267 (S.D.N.Y. 2005). Cf also Kieninger, mn. 10. 82 Cf Ned Comer v. Murphy Oil USA, 585 F.3d 855, 860 (5th Cir. 2009). 83 Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). 84 Ned Comer v. Murphy Oil USA, 585 F.3d 855, 860 (5th Cir. 2009). 85 Farber, mn. 7. 86 Farber, mns 50 et seq.; cf also Pöttker, Klimahaftungsrecht, 2014, 276 et seq. 87 Pöttker, Klimahaftungsrecht, 2014, 267. 88 Pöttker, Klimahaftungsrecht, 2014, 130 et seq., 305. 89 Farber, mns 52 et seq. 90 Pöttker, Klimahaftungsrecht, 2014, 306 et seq. 80

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genic climate change statistically increases the risk of extreme weather is not enough to fulfil these requirements.91 Here, it cannot be ruled out that the damage would have occurred just the same even without the emissions. It poses further problems that a single emission, viewed in isolation, does not have an impact on global warming (at least not a measurable one) but that the emissions have a damaging effect only cumulatively.92 It remains to be seen whether the US courts will deal with these challenging aspects of substantive law in the future or will continue to view these actions as inadmissible.

2. Canada 25

The first climate actions were brought in Canada in 2018, as Jodoin/McGinn show in their country report.93 So far, the instituted proceedings are of a public-law nature.94 Analyzing them benefits the question of potential liability under private law inasmuch as the courts do not from the outset deny that the questions posed in the context of climate liability actions are capable of being adjudicated.95 This leaves the door open for future actions under private law.

3. Brazil 26

As Wedy‘s contribution shows, Brazil grants a right to an ecologically balanced environment in its constitution (art. 225).96 The constitution provides for a triple liability for environmental damages, namely under criminal, administrative, and private law.97 The Brazilian legal system has several procedures for the judicial protection of the climate. There are legal remedies to defend a stable climate as well as to protect the basic rights of human beings and to protect animals and other environmental assets affected by extreme climatic events.98 Despite these seemingly good theoretical framework conditions, climate procedures have been rare in judicial practice in Brazil until now. In fact, individual judgments by Brazilian courts must meet with criticism in regard to environmental and climate protection.99 By contrast, the Brazilian Supreme Court has developed a progressive jurisprudence to protect the environment as an independent legal interest and to promote sustainable development.100 On the whole, Wedy considers the legal framework conditions in Brazil to be sufficient and praises the judicial recognition of climate change and its anthropogenic causes.101

4. Australia 27

As Justine Bell-James discusses in her study, the majority of climate actions in Australia focuses on official environmental impact assessments and authorizations.102 To date, there have been no private-law proceedings, although they are under discussion. Certain 91

Cf Verheyen/Lührs, ZUR 2009, 129 (136). Farber, mn. 53; Verheyen/Lührs, ZUR 2009, 129 (136). 93 Jodoin/McGinn, mns 1 et seq. 94 Jodoin/McGinn, mns 11 et seq. 95 Cf Environnement Jeunesse c Procureur général du Canada, 2019 QCCS 2885, at 56; Pembina Institute for Appropriate Development and Others v. Attorney General of Canada and Imperial Oil, 2008 FC 302, at 72. 96 Wedy, mns 36 et seq. 97 Wedy, mn. 38. 98 Wedy, mn. 42. 99 Cf Wedy, mn. 43. 100 Wedy, mn. 58. 101 Wedy, mns 73 et seq. 102 Bell-James, mns 1 et seq. 92

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argumentative structures of public-law cases could be utilized productively for private law. In 1995, Greenpeace appealed the building permit for the construction of a coal-fired power station.103 At the time, the court concluded that banning coal-fired power plants was exclusively the task of governmental policy.104 More recently, however, the courts no longer hide behind the separation of powers and an absence of justiciability. Instead, the focus now lies on questions of causality. While in 2007, a court still contested the results of the Intergovernmental Panel on Climate Change concerning climate-related global warming,105 by now, “only” the question of attribution is disputed, which examines whether the emissions of a concrete project noticeably contribute to global climate change.106 Until recently, such an attribution was denied on the basis of a market substitution assumption: Stopping an individual emission source – such as a coal mine – does not change the amount of greenhouse gases emitted worldwide net. According to this argument, in light of global demand, the coal produced by the concrete mine would simply be replaced by coal burned elsewhere, which would release the same amount of greenhouse gases.107 But in 2019, a court rejected this market substitution assumption for the first time: A hypothetical development leading to a comparable environmental pollution does not make an unacceptable environmental pollution acceptable.108 In the future, these forms of argumentation could also enter into private actions 28 against emissions-intensive industries.109 The common-law figures of the action for negligence and of public nuisance could also provide possible bases for claims, as they do in the USA.110

5. United Kingdom In Great Britain, there are a number of climate actions under public law, as Ohdedar/ 29 McNab demonstrate.111 What caused a stir in particular was the action against the government, based on the Climate Change Act 2008,112 of an NGO called “Plan B Earth”, which wanted to force the British government to reduce greenhouse gas emissions. While the action was dismissed,113 the government voluntarily changed the emission objectives afterwards, so that politically, the action was ultimately successful.114 In zoning law – regarding the construction of wind farms, for instance – global climate protection seems to be gaining importance as an argument for renewable energies and increasingly supersedes local neighbour matters in the weighing process.115 Ohdedar/McNab see significant future potential for climate actions against multi- 30 national corporations.116 In a landmark decision in 2019, the UK Supreme Court 103

Greenpeace Australia Ltd v Redbank Power Co. (1995) 86 LGERA 143. Greenpeace Australia Ltd v Redbank Power Co. (1995) 86 LGERA 143, 153. 105 Re Xstrata Coal Queensland Pty Ltd & Ors [2007] QLRT 33, [18]. 106 Bell-James, mns 18 et seq. 107 Bell-James, mns 21 et seq. 108 Gloucester Resources Limited v Minister for Planning [2019] NSWLEC 7 [545]. 109 Bell-James, mns 59 et seq. 110 Preston, Climate Change Litigation, A paper presented to: Judicial Conference of Australia Colloquium, 11 October 2008, 2 et seq., http://www.lec.justice.nsw.gov.au/Documents/preston_climate% 20change%20litigation% 202008.pdf (last consulted on 1.4.2020). 111 Ohdedar/McNab, mns 7 et seq. 112 Section 1(1) Climate Change Act 2008. 113 Plan B Earth and Others v Secretary of State for Business, Energy and Industrial Strategy [2018] EWHC 1892 (Admin) (Plan B v BEIS). 114 Ohdedar/McNab, mns 9 et seq. 115 Ohdedar/McNab, mns 22 et seq. 116 Ohdedar/McNab, mns 68; cf also Ganguly/Setzer/Heyvaert, Oxford Journal of Legal Studies 2018, 1 et seq. 104

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granted the possibility of suing foreign subsidiaries of British parent companies in UK courts.117 Following this decision, multinational companies could now also be held accountable before British courts for pollution abroad.118

6. Italy 31

As Butti discusses in his country report, no remarkable climate change action has been brought in Italy to date.119 But more recently, non-governmental organizations have considered bringing an action against the state of Italy in order to force it to take more effective measures to fight climate change. Such an action would be of a publiclaw nature. Italian scholarship does not (yet) take a position on bringing a claim against emitters under private law.120

7. France As Epstein and Deckert show, climate change litigation takes place both under public and under private law in France:121 In the “Affaire du Siècle”, instituted in 2019, four NGOs sued the French state before the administrative court of Paris to take necessary measures to reduce greenhouse gases.122 As in the USA, standing is problematic, since the actio popularis is not ruled out in France. In particular, according to French jurisprudence, it is not enough for natural persons to assert a violation of the right to live in an ecologically balanced environment, which is laid down in articles 1 and 2 of the Charter for the Environment (2004).123 One possibility for establishing standing is to found non-profit organizations, whose declared purpose it is to pursue environmental protection. As of recently, art. 142‐1 of the Code of the Environment124 grants these organizations standing that corresponds to their purpose.125 33 With regard to private law, French legislation plays a pioneering role in human rights and environmental protection. For one, since relevant legal reforms in 2001 and 2010, major companies have already had to assume numerous environmental reporting duties, which are codified in trade law126 as well as in capital markets law.127 It constitutes another groundbreaking innovation that in 2019, the company purpose was extended to include issues of corporate social responsibility.128 According to the revised art. 1833 Code civil, management must not only pursue the statutory corporate purpose but beyond this is also obligated to take social and environmental effects into account.129 32

117

Vedanta Resources PLC and another v Lungowe and others [2019] UKSC 20. Ohdedar/McNab, mn. 68. 119 Butti, mns 2 et seq. 120 Butti, mns 1 et seq. 121 Epstein/Deckert, mns 1 et seq. Cf also Cournil/Le Dylio/Mougeolle (Fn. 15). 122 Epstein/Deckert, mn. 9. 123 TA Amiens, Ord. 8/12/2005, n° 0503011; CE 3/08/2011, Mme Buguet et al., req. n° 330566, Lebon. 124 Article L. 142‐1 Code of the Environnement: “Toute association ayant pour objet la protection de la nature et de l’environnement peut engager des instances devant les juridictions administratives pour tout grief se rapportant à celle-ci.” 125 Epstein/Deckert, mns 16 et seq. 126 Epstein/Deckert, mns 49 et seq. 127 Epstein/Deckert, mns 66 et seq. 128 Epstein/Deckert, mns 75 et seq. 129 Art. 1833 Civil code: “The company is managed in its own interest taking into account the social and ecological aspects of its activity” (“La société est gérée dans son intérêt social, en prenant en considération les enjeux sociaux et environnementaux de son activité.”). 118

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The “loi de vigilance”130, passed in 2017, is a milestone of private enforcement. It 34 states that large companies with a seat in France131 must establish a risk and action plan designed for human rights and environmental protection.132 The task of safeguarding the environment and human rights pertains not only to the activities of the parent company itself but also to its subsidiaries (sociétés contrôlées).133 It also includes damage to the climate and environment arising from activities of the “sous-traitants ou fournisseurs”, the subcontractors and suppliers, with whom there is a “relation commerciale établie”, an ongoing business relationship.134 A reference to the general clause of tort law in art. 1240, 1241 Code civil establishes 35 tortious liability if the new duty of care is infringed – be it due to the complete absence of a monitoring plan or the insufficient installation or inadequate implementation of an existing plan –, and this causally leads to an environmental damage or a human rights violation.135 The “loi de vigilance” therefore introduced a new corporate duty to organize.136 Currently, in 2020, two high-profile procedures on the basis of the new law 36 concerning duty of care are pending in court in Paris: A major project of the French oil company Total S.A. in Uganda involves plans to drill in a nature reserve and to build a pipeline through Tanzania to the Indian Ocean.137 Affected parties are opposing this Tilenga-Plan before the Tribunal de Nanterre/France (where Total has its registered seat). The Tribunal de Nanterre rejected the claim as inadmissible before

130 On the law and the legal situation before its entry into force cf Nasse, ZEuP 2019, 773 et seq.; Fleischer/Danninger, DB 2017, 2849 (2851); Mansel, ZGR 2018, 439 (474 et seq.); Weller/Nasse, ZGRSonderheft 1/2020. 131 On the disputed conflict-of-law issues cf d’Avout, Recueil des cours 397 (2019), 9 (439 et seq.); d’Avout/Bollée, Recueil Dalloz 2017, 2054 (2060); Boskovic, Recueil Dalloz 2016, 385 et seq.; Kessedjian, in: Cabot/Urscheler/De Dycker (eds.), Implementing the UN Principles on Business and Human Rights, 2017, 141 et seq.; Pataut, Droit social 2017, 833 et seq.; Muir Watt, Revue critique de droit international privé 2017, 613 et seq.; Muir Watt, Revue critique de droit international privé 2019, 504 et seq. 132 Art. L. 225‐102‐4 I para. 1 Code de commerce: “Toute société qui emploie, à la clôture de deux exercices consécutifs, au moins cinq mille salariés en son sein et dans ses filiales directes ou indirectes dont le siège social est fixé sur le territoire français, ou au moins dix mille salariés en son sein et dans ses filiales directes ou indirectes dont le siège social est fixé sur le territoire français ou à l’étranger, établit et met en œuvre de manière effective un plan de vigilance.” Cf Brabant/Michon/Savourey, Revue international de la compliance et de l’éthique des affaires 93 (2017), 26 et seq. 133 Art. L. 225‐102‐4 I para. 3 Code de commerce: “Le plan comporte les mesures de vigilance raisonnable propres à identifier les risques et à prévenir les atteintes graves envers les droits humains et les libertés fondamentales, la santé et la sécurité des personnes ainsi que l’environnement, résultant des activités de la société et de celles des sociétés qu’elle contrôle (…), ainsi que des activités des sous-traitants ou fournisseurs avec lesquels est entretenue une relation commerciale établie, lorsque ces activités sont rattachées à cette relation.” 134 Art. L. 225‐102‐4 I para. 3 Code de commerce. On the notion of “relation commerciale établie” cf Nasse, ZEuP 2019, 773 (792 et seq.). 135 Art. L. 225‐102‐5 para. 1 Code de commerce: “Dans les conditions prévues aux articles 1240 et 1241 du code civil, le manquement aux obligations définies à l’article L. 225‐102‐4 du présent code engage la responsabilité de son auteur et l’oblige à réparer le préjudice que l’exécution de ces obligations aurait permis d’éviter.” 136 Cf on the duty of company organization Spindler, Unternehmensorganisationspflichten, 2nd ed., 2011; Weller/Nasse, ZGR-Sonderheft 1/2020. 137 Cf the report of the French NGO Les Amis de la Terre France/Survie, Manquements graves à la loi sur le devoir de vigilance: Le cas TOTAL en Ouganda (in the following: report), available at https://www. totalautribunal.org/ (last consulted on 1.4.2020). “EACOP” is short for “East African Crude Oil Pipeline”, cf report, 6.

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the civil courts and transferred it to the commercial courts.138 This shows that courts apparently consider the devoir de vigilance to be part of the duty of management under corporate law. 37 Furthermore, since early 2020, a number of NGOs have brought actions against Total with the twofold aim of ensuring that Total report the emissions resulting from its general corporate activity and also drastically reduce them.139 On the whole, this is a climate action directed against the emitter, which is supposed to prevail on the emitter first to make the climate risks transparent and second to adopt measures to minimize them.

8. Netherlands 38

Internationally, the Netherlands are one of the pioneering and especially progressive states in matters of climate change litigation.140 The “Urgenda” case brought there created a global stir, and lawyers worldwide, for ex. in Germany,141 are currently engaged in a controversial dispute about its “transferability” to or its (non-)model role for other countries. With its judgment of 20.12.2019,142 the Hoge Raad, the Supreme Civil Court of the Netherlands, sentenced the Dutch state to reduce the country’s greenhouse gas emissions until the end of 2020 by 25 % compared to the reference year of 1990. Thus, the Hoge Raad confirmed, in the final instance, the previous decisions of the District Court of Den Haag143 and the Appellate Court of Den Haag.144 The plaintiff “Urgenda”, a non-governmental organization constituted as a foundation, based the action on art. 3:305a of the Dutch Civil Code (BW),145 which admits the action of a foundation or an association to protect similar interests of other persons, provided that it supports these interests under its statute.146 The Hoge Raad concluded that art. 2 and art. 8 ECHR contain the Dutch state’s positive duty to reduce greenhouse gas emissions by 25 % by 2020, when compared to the 1990 state.147 Pursuant to the ECtHR’s jurisprudence, art. 2 and art. 8 ECHR obligate a state that is bound by the Convention to take appropriate measures if there is an actual and direct threat to life or to the well138 TGI Nanterre, ordinance of 30.1.2020 – N°R.G.: 19/02833, available at https://www.amisdelaterre. org/wp-content/uploads/2020/03/decision-tgi-nanterre-30012020-adt-survie-c-total.pdf (last consulted on 1.4.2020). 139 Notre Affaire À TOUS et al. ./. Total S.A. (2020). The subpoena is available at https://www.actuenvironnement.com/media/pdf/news-34876-assignation-total.pdf (last consulted on 1.4.2020). 140 de Graaf/van der Veen, mns 1 et seq. 141 Rather skeptical Gärditz (fn. 18), 383; Voland, NVwZ 2019, 114 et seq.; more optimistic Gross, EurUP 2019, 353 et seq.; Frank, NVwZ-Extra 22/2016, 1 (6); for a more nuanced analysis, see Meyer (fn. 16), 894 et seq. 142 Hoge Raad, judgment of 20.12.2019, case 19/00135, ECLI:NL:HR:2019:2006, English translation available at https://uitspraken.rechtspraak.nl/inziendocument?id=ECLI:NL:HR:2019:2007. 143 Rechtbank Den Haag, judgment of 24.06.2015, case C/09/456689/HA ZA 13‐1396, ECLI:NL: RBDHA:2015:7145, English translation available at https://uitspraken.rechtspraak.nl/inziendocument? id=ECLI:NL:RBDHA:2015:7196; on this Purnhagen/Saurer, ZUR 2016, 16 et seq.; Frank/Baldrich/Bals, in: Lozán et al. (eds.), Warnsignal Klima – Extremereignisse. Wissenschaftliche Auswertungen, 2018, 374 (377). 144 Gerechtshof Den Haag, judgment of 09.10.2018, case 200.178.245/01, ECLI:NL:GHDHA:2018:2591, English translation available at https://uitspraken.rechtspraak.nl/inziendocument?id=ECLI:NL:GHDHA: 2018:2610; on this Voland (fn. 141), 114 et seq.; Gross (fn. 141), 358 et seq.; Spier, Journal of Energy & Natural Resources Law 181, 2019, 183 et seq. 145 Hoge Raad, judgment of 20.12.2019, case 19/00135, ECLI:NL:HR:2019:2006, section 2.2.1. 146 On the role of non-state actors (private parties, associations, NGOs) in climate actions worldwide, see Streck, Journal for European Environmental & Planning Law 17 (2020), 5 et seq. 147 In detail on this Spier (fn. 144), 185 et seq.; Minnerop, Journal of Energy & Natural Resources Law 181, 2019, 149 et seq. Generally on human rights in the context of climate change Peel/Osofsky, in: Transnational Environemntal Law, 7:1 (2018), 37 (41 et seq.).

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being of a person and the state is aware of this.148 Art. 93 and art. 94 of the Dutch constitution in turn obligate the Dutch courts to apply the binding provisions of the ECHR, and beyond this, art. 32 ECHR even binds the Netherlands to the ECtHR’s jurisprudence.149 In the Hoge Raad‘s view, there is a serious risk of climate change that threatens the life and the well-being of many people in the Netherlands, so that the state is obligated by art. 2 and art. 8 ECHR to do “its part”, in accordance with its specific responsibilities and abilities, to reduce the country’s emissions.150 The Hoge Raad states that the duty of a 25 % reduction is deduced from an international consensus in this matter and that the reduction of 25‐40 % by 2020 corresponds to an IPCC recommendation from the 4th Assessment Report. What is more, the Court states that almost all countries at the yearly climate conferences within the framework of the UN Climate Convention regularly emphasized the need to follow this IPCC scenario and achieve a corresponding reduction.151

VI. Liability for climate damages – Germany as an international pioneer? At times, the domestic public is under the impression that from an international 39 perspective, Germany is a pioneer in climate protection. This certainly holds true for some areas of public law. Concerning the private-law approaches to climate protection examined in this volume, there are progressive approaches – such as in corporate social responsibility under corporate law – but one cannot (yet) speak of a pioneering position. In detail:

1. Environmental Damage Act The contribution of Kahl/Stürmlinger analyzes the liability for climate damages under 40 the German Environmental Damage Act (EDA, Umweltschadensgesetz, USchadG), which was issued to implement the Environmental Liability Directive. The analysis focuses on two central conditions of liability: Firstly, there must be an environmental damage. Secondly, there must be a responsible party that caused the damage.152 Climate damages can be environmental damages within the meaning of the EDA. In terms of legal effects, the responsible party must in principle carry the costs of preventive, damage control, and remedial measures. But on the whole, despite a name that sounds comprehensive (“Environmental” Damage Act), the EDA is not specifically adapted to climate damages, in terms of its genesis and its limited purpose. It presents itself as an act that encompasses certain climate damage constellations and establishes the cost-bearing duties of the responsible party in these cases, but the majority of possible climate damage constellations do not fall under the act’s scope of application. Consequently, Kahl/Stürmlinger categorize the significance of the EDA for climate actions as slight.153

148

Hoge Raad, judgment of 20.12.2019, case 19/00135, ECLI:NL:HR:2019:2006, section 5.2.1.-5.2.3. Hoge Raad, judgment of 20.12.2019, case 19/00135, ECLI:NL:HR:2019:2006, section 5.6.1. 150 Hoge Raad, judgment of 20.12.2019, case 19/00135, ECLI:NL:HR:2019:2006, section 5.6.1.–5.8. 151 Hoge Raad, judgment of 20.12.2019, case 19/00135, ECLI:NL:HR:2019:2006, section 6.1.–7.3.6. 152 Kahl/Stürmlinger, mn. 3. Cf on this also Beckbissinger, EurUP 2020, 2 et seq. 153 Kahl/Stürmlinger, mn. 63. Similar in result, but with a greater focus on the complex questions of attribution and causation, Beckbissinger (fn. 152), 15 et seq. 149

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2. Role of the NGOs 41

Verheyen/Pabsch examine the role of non-governmental organizations in fighting climate change.154 Since in German law, an independent action by NGOs often fails because it would violate the organization’s own rules (in other words due to lack of standing), NGOs have for the most part appeared only indirectly in the proceedings to date, by supporting the action of a private party which can claim an independent legal violation, so for instance in the case Lliuya vs. RWE, in which the farmer claims the infringement of his property.155 In the environmental domain, the Environmental Appeals Act, which originally traces back to the Aarhus Convention, establishes the possibility of an action by NGOs in some cases, regardless of whether their own subjective rights have been injured.156 Following the Federal Administrative Court’s jurisprudence on Darmstadt’s Clean Air Plan,157 the NGOs may also be granted a right of group action to enforce European environmental law, also in cases that do not fall within the scope of application of the Environmental Appeals Act.158 In this respect, case law is inconsistent.159

3. Corporate climate responsibility Habersack/Ehrl demonstrate that climate protection aspects play a key role in listed companies in particular.160 Especially the CSR reporting duties encourage the management board to focus on a sustainability strategy and address the treatment of climate risks. Beyond this, climate aspects enter into the management discretion of the management board within the framework of corporate decisions: Protecting climate and environmental concerns may improve corporate reputation – while conversely, ignorance would damage the company, making the management board liable for damages under § 93 AktG.161 43 By contrast, Habersack/Ehrl are critical of the Federal Development Ministry’s efforts to introduce a special act “regulating human rights and environmental due diligence in global value chains”162.163 Such a climate-related duty of care, reinforced by liability, would depart from the conceptional bases of §§ 823 et seq. BGB and should therefore be considered at most as the ultima ratio.164 It would be preferable to increase the managing directors’ duties of care under corporate law. Habersack/Ehrl advocate for expanding § 91 para. 2 AktG:165 The management board should be obligated to extend possible monitoring systems to climate and environmental aspects as well. Such an 42

154 Cf on their role within the framework of the development of the Paris Agreement on climate protection also Kosa, EurUP 2020, 17 et seq. 155 Verheyen/Pabsch, mn. 13. 156 Verheyen/Pabsch, mn. 25. 157 BVerwG, judgment of 5.9.2013, 7 C 21.12. 158 Verheyen/Pabsch, mns 39, 55 et seq. 159 Verheyen/Pabsch, mn. 43. 160 Habersack/Ehrl, mns 1 et seq. 161 Habersack/Ehrl, mns 28 et seq. 162 Cf https://www.business-humanrights.org/de/entwicklungsministerium-erarbeitet-vorschlag-fürwertschöpfungsketten-gesetz-für-deutsche-unternehmen (last consulted on 1.4.2020). 163 Habersack/Ehrl, mn. 35. 164 Critically with regard to human rights due diligence cf Habersack/Ehrl, AcP 219 (2019), 155 (190 et seq., 205); also Wagner, RabelsZ 80 (2016), 717 (780 et seq.); for group situations Fleischer/Danninger, DB 2017, 2849 (2856 et seq.); but see Payandeh, in: Boele-Woelki et al. (eds.), Festschrift für Karsten Schmidt zum 80. Geburtstag, Vol. 2, 2019, 131 (139 et seq.). 165 Cf Habersack/Ehrl, AcP 219 (2019), 155 (208 et seq.) with regard to human rights due diligence of companies.

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expansion would be suited to concretizing the relevant management duties and sensitizing the stockholders in this regard.166

4. Delictual climate change liability Under German tort law, it is not possible, in prevailing opinion, to establish the 44 liability of greenhouse gas emitters for climate change de lege lata.167 The restriction of § 823 para. 1 BGB to the protection of absolute legal interests constitutes a first barrier.168 It becomes apparent that this so-called small general clause under tort law has a filtering function in favour of the companies.169 Under tort law, only such environmental damages would be sanctioned that had in fact led to a violation of absolute legal rights, for ex. to a violation of property. By contrast, climatic phenomena such as drought or heat do not suffice as such. Instead, they would first have to have manifested themselves in an injury of legal interests, in order to be able to result in compensation under § 823 para. 1 BGB.170 Apart from this, private emitters are liable neither under tort law nor as disturbers (§§ 823, 1004 BGB), since, as Wagner/Arntz show in detail, the elements of causality171 and of the unlawfulness of the emission are not met.172 The authors argue that tort law and property law, with their either-or approach 45 (compensation, elimination, omission: yes or no), are unsuited to give meaningful answers to global warming.173 It is not a matter of eliminating emissions entirely. Rather, they must be reduced. There is a need for proportionate and graduated legal remedies and incentivizing mechanisms, which would require agreement in international treaties.174 In any event, tort law, with its all-or-nothing concept of compensation, cannot give such proportional and graduated answers.175

VII. Tendencies and prospects As the contributions in this volume demonstrate, the questions that arise in connec- 46 tion with the judicial claim of climate damages are complex and extremely varied. They vary on the different levels of the multi-level legal system as well as in the national legal orders of the different countries. Moreover, the entire subject matter is still relatively young and in statu nascendi. Therefore, only general conclusions are possible, which express certain tendencies and encompass various levels and states.

1. Primacy of the legislature, supplemental function of the courts While in many countries, the courts are potentially in a position to impose relevant 47 positive duties on the legislature and the national authorities, thus forcing them to issue more measures to fight climate change, it will still take years before final judgments from the respective Supreme Courts are available. But in this respect, too, it must be 166

Habersack/Ehrl, mn. 35. Wagner/Arntz, mns 99 et seq. 168 Sprau, in: Palandt Bürgerliches Gesetzbuch, 79th ed., 2020, § 823 BGB, mns 2, 11. 169 Weller/Thomale, ZGR 2017, 509 (521). 170 Weller/Kaller/Schulz, AcP 216 (2016), 387 (400); Wagner, RabelsZ 80 (2016), 717 (754). 171 Wagner/Arntz, mns 36 et seq., 89, 95. 172 Wagner/Arntz, mns 63 et seq., 95. 173 Wagner/Arntz, mns 99 et seq. 174 Wagner/Arntz, mns 99 et seq. 175 Wagner/Arntz, mns 99 et seq. 167

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considered – as noted at the beginning – that climate change as a global challenge to the community of states can only be effectively limited if all states or as many as possible (among them in any event the greatest emitters) work together and cooperatively look for international, legally binding solutions. It can have a knock-on and guiding effect when individual courts in some states “forge ahead”, but this can never replace the international cooperation of national governments and parliaments that is required to fight climate change – it can only control and at most (and only within narrow limits) correct them. This also follows from the principles of democracy and the division of powers. Climate protection remains above all a political (legislative) task. Courts are not “substitute legislatures”, but they play an important supplemental role. Yet the priority is and remains that those states already pursuing the most ambitious climate goals should as quickly as possible act globally as “driving forces” and multipliers of climate protection. The responsible political actors in the eligible states (“model states”) will be more willing to take on this role if they have decided on dedicated climate protection measures voluntarily and were not forced to do so by their courts. However, in case of complete inactivity or obviously deficient climate protection measures, it is not possible to dispense with the “guardian role” of the courts in conjunction with “critical” citizens or those whose legal interests have been individually damaged by climate change, if necessary assisted by NGOs “in the background” (mobilization of the individual and of environmental associations). But instead of “waiting” for the courts’ judgments, policy should take the initiative and create the concrete framework conditions under international, European, and national law – often still lacking – to effectively combat climate change, as well as provide efficacious instruments176 of monitoring compliance combined with effective sanctioning and other reaction mechanisms (for ex. amendments).

2. Basic right or state objective: climate protection in the national constitutions? 48

In many countries, the constitution does not yet grant any explicit subjective right (basic or human right) to climate protection.177 In Germany, the state objective of climate protection (art. 20a GG) gives rise to the state’s objective legal duty to protect the climate, without granting a subjective right. Such general environmental protection clauses are very common in the national constitutions.178 What is more, a constitutional duty to protect the climate can also follow from other fundamental rights (life and health, occupational and property freedom). These basic rights are not only rights of defence against the state but also establish the state’s duties of protection (which the individual can claim).179 The legislature has a broad scope of discretion when choosing the measures it implements to fulfil its duties of protection.180 Actions lodged on the grounds that the legislature has refrained from taking suitable measures for climate protection will therefore likely often fail, because it cannot be proven that the legislature’s measures are evidently insufficient. Several pending or announced constitutional complaints before the Federal Constitutional Court181 lead one to expect a pioneering 176 For more information, especially on the instrument debate in the field of climate protection, s. Faure, ZUR 2020, 141 et seq. 177 Gross, mn. 6. 178 Gross, mn. 7. 179 Bickenbach, JZ 2020, 168 (170 et seq.). 180 Cf representatively for many Purnhagen/Saurer, mn. 50; Gross, mns 17 et seq. 181 A pending constitutional complaint is registered as case 1 BvR 2656/18; on another announced constitutional complaint against the German climate-protection law see Meyer (fn. 16), 894; Gross, NVwZ 2020, 337 (337 et seq.).

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jurisprudence from Karlsruhe in the foreseeable future, concerning the significance of the state’s duties of protection, specifically with regard to climate protection.182 In addition, duties of protection also play a partial role in the context of climate actions brought by individual plaintiffs or environmental organizations before administrative courts.183 A basic right to climate protection would not be able to change this either. To the 49 contrary: It would raise constitutional expectations with the citizens, which would (inevitably) often be disappointed in constitutional reality, because of the generally complex, multipolar decisions of the legislature, which involve a weighing process and must also take economic and social concerns into consideration. As a result, such a basic right would ultimately promise more than it is able to keep. Therefore, and also because of the generally not particularly good experiences with social basic rights, a basic right to climate protection is not advisable. In Germany, there is consequently a discussion whether climate protection should be 50 adopted in objective-law form, namely as its own state objective, in the Basic Law or should be explicitly supplemented in the existing state objective of environmental protection.184 But this does not seem absolutely necessary. Constitutional amendments are generally advisable if three requirements are cumulatively present:185 First of all, the matter at stake should be an important concern of the common good. Secondly, the concern should have significance that crosses generational lines. And thirdly, the constitutional amendment should bring clear added value. For climate protection, the first two requirements are fulfilled,186 but the third is not, since climate protection, as mentioned, already falls within the scope of the state objective of environmental protection in art. 20a GG and is covered by the state’s duties of protection concerning the basic rights to life and physical integrity. The crux of these approaches to protection – the legislature’s broad prerogative of assessment and, on the other hand, the minimal judicial self-restraint – would not be changed by adopting a state objective of climate protection. In light of these facts, doing so would at most have the slight symbolic added value of declared affirmation.

3. Emission reduction objectives in the constitution? Another possibility for strengthening the judicial enforcement of climate protection 51 by means of a constitutional amendment would consist in codifying concrete climate protection objectives, such as emission reduction objectives, in the constitution or referring to the international climate protection obligations valid at that particular time (currently: Paris Agreement) by means of a dynamic reference.187 182

In detail on this Gross, NVwZ 2020, 337 (339 et seq.). Thus, the Administrative Court of Berlin (Verwaltungsgericht, VG) dismissed an action for performance by private individuals and Greenpeace for compliance with the federal government’s action programme Climate Protection 2020, but it admitted the appeal, “because the question of the individual plaintiffs’ legal standing for the injury of duties of protection is of fundamental importance”, cf VG Berlin, judgment of 31.10.2019 – 10 K 412/18, ZUR 2020, 160 (with annotation of Schomerus, ibid., 167) = BeckRS 2019, 35475 mn. 98. 184 Reporting on this discussion Kloepfer, in: Kahl/Waldhoff/Walter (eds.), Bonner Kommentar zum Grundgesetz, 2020, Art. 20a GG (2020), mns 153 et seq., in publication. 185 Calliess, in: Konrad-Adenauer-Stiftung e.V., Der Klimaschutz führt ein verfassungsrechtliches Schattendasein, 2019, 4. Cf on this entire issue also Kahl, Nachhaltigkeitsverfassung, 2018, 21 et seq. (esp. 43 et seq.). 186 Thus also Calliess (fn. 185), 4. 187 Thus for instance the – so far unsuccessful – proposal of the Greens party (Bündnis 90/Die Grünen) in the German Bundestag, cf Bundestag publications 19/4522 and 19/13538. Affirmatively Cremer, ZUR 2019, 278 et seq. 183

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Yet the regulatory technique itself already speaks against a dynamic reference: It must be possible to measure constitutional amendments against art. 79 para. 1 cl. 1 Basic Law and so also against the imperative of legal clarity.188 But the proposal of a dynamic reference fails to name explicitly those objectives and duties that should be included as directly applicable constitutional law by dint of reference. In other words: The concretely applicable law in each case would no longer be inferable only from the constitutional text itself.189 53 The risk of “petrification” speaks against the constitutional anchoring of concrete (static) emission reduction objectives (for ex. 2 degree or 1.5 degree goal), since a – necessary – dynamic revision and adaptation of these objectives to new, possibly unforeseen developments would be legally and factually complicated. This would necessitate a constitutional amendment, for which there are very high hurdles. 54 What is more, the commitment to the international goals applicable in each case as well as the definition of certain concrete reduction goals in the constitution amounts to a carte blanche to limit the reduction to the quota demanded in each case and to maintain emissions that go beyond it with constitutional approval. This would stand in the way of a national climate protection that is especially ambitious in international comparison, one which goes beyond the smallest common denominator generally regulated in international treaties. Emitters would be tempted to bring about only the necessary emission reductions instead of the optimal reductions. But climate protection requires taking the relevant optimal measures to reduce CO2. The experiences with the European emission trading scheme are also instructive in this respect. The number of emission allowances on the market was so high in the first allocation periods, due to unforeseen technological developments, that there was a surplus of allowances, threatening the system’s effectiveness. The emission trade could not fulfil its task to create climate-friendly technologies and procedures, because the surplus of allowances had given the emitters a carte blanche for emissions.190 While the EU thus guided the reduction of greenhouse gas emissions overall, it simultaneously prevented a more effective and quicker CO2 reduction. As a result, the EU emission trading scheme was amended multiple times, in order to eliminate this weakness. Against this background, there is all the more reason to warn that including reduction objectives in the constitution itself will “cement” the current condition, since constitutions are especially “cumbersome” rules of law, as a result of the (rightfully) high hurdles put into place for their amendment. “Constitutionalizing” climate protection by defining emission reduction objectives would consequently stand in the way of the required dynamic and flexible progress, also in the short-term, of emission reduction policy, in which individual, especially progressive states act as a driving force. 52

4. Private enforcement 55

As the contributions in this volume show, climate protection is primarily a task of international law and public law and there, above all, of the legislature. But private law and the civil courts can have an important leverage function and play a vital complementary role:191

56

a) Leverage. For one, the enforcement of guarantees under public law can be significantly increased by (additionally) activating the citizens as potential creditors. 188 Reimer, in: Kahl/Waldhoff/Walter (eds.), Bonner Kommentar zum Grundgesetz, 2020, Art. 79 para. 1 and 2, mn. 167. 189 Kloepfer (fn. 184), mn. 155. 190 Kahl/Gärditz, Umweltrecht, 11. Aufl. 2019, § 6 mn. 22. 191 On the dichotomy of private and public law enforcement cf Kern, ZZPInt 12 (2007), 351 et seq.

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There are numerous prominent legal areas whose significance has increased enormously, precisely because they were opened to private legal enforcement as well. One can think of European law (van Gend & Loos192), antitrust law (Courage193 and Manfredi194), and human rights (Human Rights Litigation195). European law, for instance, only became an independent legal order separate from international law when the ECJ, in addition to the (few) Member States, accorded the millions of EU citizens the active legitimation to enforce basic freedoms.196 Private enforcement provided the ECJ with the great number of cases – i.e. with the leverage – required to shape a legal field in a multitude of constellations and to have an impact that extends into many spheres of life. Put differently: Public enforcement can greatly increase the significance of an area of law by means of additional private enforcement. b) Complementary function. What is more, private law can give the higher-ranking 57 guarantees of the basic and human rights, insofar as they pertain to climate protection (for ex. the right to protection of the natural bases of life), substantive precision and so practical effectiveness.197 It is true that basic and human rights are subjective rights in the vertical relationship between the private individual and the (obligated) state.198 But the latter has a duty of protection to ensure that human rights are observed in the horizontal relationship between private parties as well,199 while a direct duty of private companies to safeguard human or basic rights is not recognized as such. Therefore, in a horizontal relationship, private parties cannot bring direct claims against other private parties based on these rights.200 In addition, the enforcement of basic and human rights in the horizontal relationship 58 proves lacking:201 First, they are usually formulated in such vague and general terms that, taken on their own, they are not suited to be justiciable decision rules that allow for syllogistic reasoning. Thus, for instance, it is hardly possible to condense the right to protection of natural bases of life into concrete rules on emission reduction. Second, international and public law do not impose a general regime of sanctions on private parties if their provisions are violated. Third, international and public law lack mechanisms for actions vis-à-vis private parties. These deficits in horizontal effect and in enforcement can be remedied if private law 59 is employed as a regulatory regime that complements the guarantees under public law. The complementary function can find expression in the legislature’s establishment of special tort laws to protect the climate (such as the “loi de vigilance” in France in 2017). Alternatively, within the framework of its power to grow the law, the judiciary can harmonize general tort clauses with basic and human rights by means of appropriate ECJ Case C-26/62 Van Gend & Loos ECLI:EU:C:1963:1. ECJ Case C-453/99 Courage/Crehan ECLI:EU:C:2001:465. 194 ECJ Case C-295/04 Manfredi ECLI:EU:C:2006:461. 195 Weller/Nasse, ZGR-Sonderheft 1/2020; Weller/Kaller/Schulz, AcP 2016, 387 et seq.; Wagner, RabelsZ 80 (2016), 717 et seq. 196 ECJ Van Gend & Loos (fn. 192): “According to the spirit, the general scheme and the wording of the EEC Treaty, Article 12 must be interpreted as producing direct effects and creating individual rights which national courts must respect”; on this “judgement of the century” Kohler/Puffer-Mariette, ZEuP 2014, 696 (704 et seq.). 197 Weller/Nasse/Nasse, in: Benicke/Huber (eds.), Festschrift Kronke, 2020, 601 et seq. 198 Federal Government, National Action Plan of 21.12.2016, 4: “The ultimate obligation to protect human rights continues to lie with states”; Hennings, Über das Verhältnis von multinationalen Unternehmen zu Menschenrechten, 2009, 43. 199 Cf Ruggie-Principles No. 25 and 26; Klinger/Krajewski/Krebs/Hartmann, Verankerung menschenrechtlicher Sorgfaltspflichten im deutschen Recht, 2016, 13. 200 Wagner, RabelsZ 80 (2016), 717 (721 et seq.). 201 Kaleck/Saage-Maaß, Unternehmen vor Gericht, 2016, 54. 192 193

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interpretation. In both cases, the generally formulated climate protection guarantees which exist under basic and human rights participate in the doctrinally differentiated institutions of private law. Here, international and public law can build on subsumable elements (for ex. violation of legal interests, causality, unlawfulness, fault) and legal effects (for ex. elimination, omission, compensation) and so have a horizontal effect. 60 Consequently, if consistently activated, private law can contribute to internalizing the social costs of greenhouse gas emissions. It is put to work for the objectives of society as a whole and to this extent functions as political private law.202 c) Strategic litigation. To date, private enforcement – provided that it is not directed against a specific project but rather against the effects of climate change as such – only plays a role in a few countries. As the country reports have shown, the success rate of these few procedures is sobering from the perspective of the environmental movement. As far as can be seen, not a single action was successful before the civil courts to date. 62 But many procedures have attracted media attention, not least because the plaintiffs received accompanying support from non-governmental organizations.203 Non-governmental organizations also especially aim to sensitize society as a whole to climate change and its negative effects, beyond the individual case, in order thus to exert pressure to act on political decision-makers and market participants (so-called strategic litigation).204 The European Center for Constitutional and Human Rights (ECCHR) emphasizes: 61

“Strategic litigation aims to bring about broad societal changes beyond the scope of the individual case at hand. It aims to use legal means to tackle injustices that have not been adequately addressed in law or politics. (…) Successful strategic litigation brings about lasting political, economic or social changes and develops the existing law. (…)” If one takes this purpose of civil proceedings into account, then dismissed actions can also be successes if they sensitize economic actors and the public. This is all the more true since the courts are now taking up the findings of climate science and the thesis of anthropogenic climate change.205 63

d) Bases of liability under substantive law. In the examined legal orders, the bases of claims for the liability of private greenhouse gas emitters are to be found primarily in tort law (negligence, §§ 823 et seq. BGB) and in the right to the protection of property from disturbances (public nuisance; § 1004 BGB, § 906 para. 2 cl. 2 BGB, § 14 cl. 2 BImSchG). Some legal orders provide specifically environmental legal institutions in addition to general ones (UmweltHG, jurisprudence of the Brazilian Superior Court of Justice on liability regardless of fault206). Defensive claims, claims for damages as well as compensation claims for precautionary measures can be asserted on this basis. From the perspective of comparative law, it can be established that where the violation of common legal interests is concerned, the common-law legal systems, which include the institution of public nuisance, go beyond the systems of civil law, which focus primarily on the violation of individual legal interests.207

202

Weller/Thomale, ZGR 2017, 509 (516 et seq.). Verheyen/Pabsch, mns 1 et seq. 204 ECCHR, https://www.ecchr.eu/en/glossary/strategic-litigation/ (last consulted on 1.4.2020). 205 Cf OLG Hamm, decision of 30.11.2017 – I-5 U 15/17, ZUR 2018, 118. 206 Supra V.3. 207 United Nations Environment Programme, The Status of Climate Change Litigation: A Global Overview, 2017, 34; Kloepfer/Mast, Das Umweltrecht des Auslandes, 1995, 120 et seq. 203

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aa) Causality/imputability. Like in public law, the polluter-pays principle208 consti- 64 tutes the fundamental problem of all bases of liability in private law as well, concretely in the shape of the elements of causality and imputability. In essence, two sets of problems arise here.209 The scientific cause-effect uncertainties of emissions, the global temperature increase and its effects on very different aspects, such as the sea level, the melting of glaciers, or weather extremes, impact the question of causality in the binary relationship between the plaintiff and the defendant.210 At any rate, a merely statistical increase in extreme weather events does not suffice for the requirements of but-for and proximate causality. With regard to other environmental changes, one must consider that the regional micro-climatic changes do not necessarily correspond to the average and scientifically proven global conditions.211 The second problem area results from the large number of emitters whose individual emissions, taken on their own, do not have an essential impact on climate change. They only become (jointly) causal as a result of their accumulation and summation. The question of the attribution of a climate damage thus arises, that is, whether and according to what criteria an individual party from the incalculable group of emitters can be held liable in isolation.212 bb) Unlawfulness/breach of a duty of care towards third parties. A second barrier 65 to liability is the element of the unlawfulness of greenhouse gas emission. For the indirect violations (activity with significant greenhouse gas emission) or deficits of organization (neglecting to take climate-friendly measures) typically present here, unlawfulness must be positively established by first identifying the existence of a duty of care towards third parties in the light of a hazard and then reviewing whether this duty has been violated. For instance, do operators of power plants or other large industrial installations have the duty to emit a lower (than allowed) quantity of greenhouse gases?213 For one thing, the (international) scope of public-law authorizations for the emission of greenhouse gases is crucial here. For another, one must take into account a conflict of duties: A duty of care towards third parties to reduce emissions may collide with the common interest in a lasting energy supply, an interest that may even be codified as public-law service requirements. Especially in Germany, there is great scepticism that this central barrier to liability can 66 be overcome.214 To the extent that the courts answer these questions, those answers should ideally be consistent across various areas of the law and jurisdictions,215 which in principle is only possible if the community of states agrees on an international regulation.216 e) Corporate climate responsibility. In corporate law, incentives or even duties of 67 conduct are also part of private enforcement. Over the last years, corporate social responsibility (CSR) has increasingly gained momentum in this area.217 By now, the duty of the management board and the management directors involves not only pursuing shareholder interests (shareholder value) but also being guided by other – corporate – interests (stakeholder value). In France, this expansion of the corporate 208

Supra II.1. as well as the contribution of Rehbinder, mns 1 et seq. Wagner/Arntz, mns 47 et seq. Cf Pöttker, Klimahaftungsrecht, 2014, 33 et seq.; Chatzinerantzis/ Appel, NJW 2019, 881 (882 et seq.); Frank, ZUR 2013, 28 et seq. 210 Pöttker, Klimahaftungsrecht, 2014, 140. 211 Wagner/Arntz, mn. 50. 212 Pöttker, Klimahaftungsrecht, 2014, 51 et seq. 213 Negatively Wagner/Arntz, mn. 69. 214 Wagner/Arntz, mn. 69; Chatzinerantzis/Appel, NJW 2019, 881 et seq. 215 Wagner/Arntz, mn. 8, 100; Pöttker, Klimahaftungsrecht, 2014, 74, 98 et seq., 140. 216 Supra VII.1. 217 Habersack/Ehrl, mns 1 et seq. 209

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purpose to include environmental and CSR concerns was even codified in art. 1833 Code civil.218 In this context, one may observe that the two main pillars – human rights responsibility and environmental responsibility or, more specifically, climate responsibility – are emerging as independent subdisciplines of CSR.219 Very different jurisdictions illustrate this fact. Australia offers an example:220 On the basis of the Corporations Act 2001 (Sth) s. 180 (1)221, company management is now expected to thoroughly analyze the financial risks of climate change for the corporation, shape its corporate management accordingly, and disclose all climate-related risks.222 In 2017, a group of shareholders promptly initiated proceedings against the Commonwealth Bank of Australia for failure to adequately disclose corporate risks related to climate change.223 68 Corporate climate responsibility in particular could become a key to success in the battle against global warming. Unlike in the law of tort liability or the liability of the disturber, causality and unlawfulness are less of an issue here. For the corporations do not only have an interest in avoiding liability discussions from the outset. Instead, they wish to secure positive resonance for their corporate policy. Hopefully, as a result of this wish, they will attempt to proactively reduce their potential contribution to the causes of global warming.

5. Conclusion 69

It is and remains primarily the legislature’s task to pass laws that lead, as quickly and effectively as possible, to emission reductions in all sectors, in particular in energy production, industry, heating, traffic, and agriculture. International cooperation is central in this project, but so is the model and pioneering role of individual states or associations of states (in particular the EU). Climate protection measures must be taken on all levels (internationally, at the European level, nationally, regionally, and locally224), involving all available actors, not least also private parties,225 NGOs, and civil society (polycentric climate protection governance, transnational climate protection).226 Topdown and bottom-up approaches should complement each other in a meaningful way.227 Climate actions against states and above all against companies are already one228 important instrument in this process today.229 218

Supra V.7. and Epstein/Deckert, mns 75 et seq. Habersack/Ehrl, mns 1 et seq. 220 Bell-James. mns 45 et seq. 221 Under Corporations Act 2001 (Sth) s. 180 (1), a member of the management board or another executive of the company must exercise his or her powers and duties with the measure of care and diligence that a reasonable person would apply in this concrete role and under the same circumstances. 222 Hutley/Hartford Davis, Climate Change and Directors’ Duties – supplementary memorandum of opinion, 26 March 2019, mns 21 et seq., https://cpd.org.au/wp-content/uploads/2019/03/Noel-Hutley-SCand-Sebastian-Hartford-Davis-Opinion-2019-and-2016_pdf.pdf (last consulted on 1.4.2020). 223 Bell-James, mn. 51. 224 On the role of cities in particular in the fight against climate change Albrecht, ZUR 2020, 12 et seq.; Zengerling, ZUR 2020, 3 et seq. 225 Cf Streck, JEEPL 2020, 5 et seq. 226 Boysen, ZUR 2018, 643 et seq.; Franzius (fn. 5), 504 et seq.; Spiesshofer, AVR 57 (2019), 26 et seq.; generally Dilling/Markus, Journal of Environmental Law 30, 2018, 179 et seq. On the contribution of the global South in particular, see Peel/Lin, The American Journal of International Law 113, 2019, 679 et seq. 227 Similarly Mayer, RECIEL 28 (2019), 107 et seq. 228 Of course, they must be accompanied by a combination of other instruments of climate protection (for ex. emission allowance trading, taxes on CO2, fossil fuel phase-out, support for renewable energy, building refurbishment, changes in transportation, organic agriculture, reforestation, etc.) – a combination of instruments that is as coherent as possible and avoids disproportionate cumulations of burdens (interferences in basic rights) as well as dysfunctional effects. 229 For a good overview, which is also analytically instructive, see for ex. Saurer, ZUR 2018, 679 et seq.; also Frank/Baldrich/Bals (fn. 143), 374 et seq.; Frenz (fn. 14), 2 et seq.; Meyer (fn. 16), 894. 219

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Their significance will probably grow in the future, in particular as soon as the 70 number of successful actions increases and first liability actions under private law are successful (in Germany, for instance the Peruvian farmer’s action against RWE before the Higher Regional Court of Hamm230 or subsequently before the Federal Court of Justice), that is to say, if the first courts believe that the threshold of causality can be overcome. This would certainly be a “watershed” of considerable magnitude for the doctrine of private liability law but would also entail considerable financial consequences (liability risks) for the major CO2 emitters in the corporate sector.231 This point, at the latest, would indeed mark a “rights turn in climate change litigation”.232 But then, too, this much would still have to hold true: Climate actions can only ever supplement – not replace – effective climate protection legislation and its effective administrative enforcement. 230 In the first instance (District Court of Essen), the action was unsuccessful; cf LG Essen, judgment of 15.12.2016 – 2 O 285/15, NVwZ 2017, 734; on this Frank, NVwZ 2017, 664 et seq.; Kling, KJ 2018, 213 et seq.; Gärditz (fn. 18), 384 et seq.; Köck, ZUR 2107, 373 et seq. On the proceedings before the Higher Regional Court of Hamm, see OLG Hamm, decision of 30.11.2017 – I-5 U 15/17, ZUR 2018, 118; critically Ahrens, VersR 2019, 645 (646 et seq.). 231 Cf Chatzinerantzis/Appel, NJW 2019, 881 et seq.; Keller/Kapoor, BB 2019, 706 et seq.; Rumpf, EurUP 2019, 145 et seq. 232 The term used by Peel/Osofsky, Transnational Environmental Law 7:1, 2018, 37.

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Index A Aarhus Convention Y 35 et seq., 54 et seq. Absolute liability G 27, 49 et seq. Access to court(s) D 32 et seq.; Y 19 et seq. Acid-Rain Case T 44 et seq. Actio doli (German law) T 76 Actio Negatoria: T 80 et seq. Activism, political A 20, 21, 23, 34, 58 Adaptation Intro. 52 et seq., 58 et seq.; C 14 et seq., 31, 33 et seq.; I 1 et seq., 18 et seq., 28 et seq. Adaptation Fund E 72 et seq. Adaptation measures P 16 et seq. Adequacy T 48 et seq. Administrative Law K 26–36 Advisory Opinion C 5 et seq. African Commission on Human and Peoples’ Rights C 6 African Court on Human and Peoples’ Rights C 6 Agency, human (moral and political) A 7, 8, 26 et seq., 29, 31, 38, 40 et seq., 49–61 Agency, non-human A 25, 26, 29, 30, 43 et seq., 59, 61 Altruistic constitutional complaint Y 65 et seq. Amazon Rainforest M 12 et seq. Amount of compensation G 15 et seq., 20, 54 Anchor defendant F 26 et seq. Anthropocene A 28–30, 32, 36, 41 et seq., 44, 49, 52, 56, 60 et seq. Anthropocentrism A 24 et seq., 27 Applicable law S 40 et seq. Arbitration Synth. 17 Arbitration Law E 13 et seq. Attribution of climate change S 17 et seq. Attribution of harm K 53 B Bearing of costs X 58 et seq. Beneficiary pays principle A 38 Bottom-up approach I 3, 37 Brazilian Constitution M 11 Brazilian Forest Code M 39 Brazilian Government M 13 et seq. Brazilian Solid Waste Act M 39 Breach of Statutory Duty (German Law) T 74 et seq. Budget approach I 15 et seq. Business judgement rule V 16, 29 Business Sustainability W 3 et seq., 23 et seq., 63 et seq. But-for Causation T 39 et seq.

C Carvalho C 2, 6, 8, 18, 22 Carvalho et alii v. Parliament and Council A 55 Causality/Causation A 8 et seq., 30, 39, 47; B 30 et seq., 33 et seq., 39, 42 et seq.; G 1, 48, 53; S 80 et seq.; J 37, 40, 55–57; T 36 et seq.; U 34 et seq.; X 36 et seq.; Synth. 64 – Causal chain X 43 et seq. – Causal link Q 37 et seq. – Cumulative causality X 43 et seq. – Direct causation X 33 et seq. – Joint causation X 47 – Proof of causation X 39 et seq. Civil liability regimes G 2, 4 et seq., 19 et seq., 24 et seq., 32 et seq., 41 et seq., 47 et seq. Class action L 47 et seq. ClientEarth C 11 Climate Act R 43 et seq. Climate Activism O 19, 54 et seq. Climate adaptation K 20, 41–44 Climate Agreement R 54 et seq. Climate change R 1 et seq.; L 1 et seq. Climate crisis L 1 et seq. Climate Change Law M 12 et seq. Climate Change Litigation H 11–38 Climate change mitigation N 1 et seq. Climate Change National Policy Act M 44 Climate Change-related Disclosure W 1 et seq. Climate Change-related Litigation W 60 et seq. Climate Change Reporting W 42 et seq., 64 Climate damage(s) Intro. 55 et seq., 93; B 14, 50, 27 et seq.; X 14 et seq. Climate emergency P 32 et seq. Climate Finance E 70 et seq. Climate Litigation in Brazil M 77 Climate protection Act Y 30 et seq., 55, 86 et seq. Climate protection plan Y 47, 55, 81 Climate protection provisions V 13, 16 et seq. Climate system S 5 et seq. Coal, coal mines N 43 Collective action P 18 et seq. Collective ‘Polluter pays’ principle B 35 Common burden principle B 36 Common good V 4 et seq., 11, 12, 14, 29 et seq. Company Law O 68 Compensation C 5, 15, 21 Complementary Function Synth. 57 et seq. Compliance V 3 et seq., 9 et seq., 15 et seq., 31

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Index Conferring rights on individuals J 34, 43–49 Conflicts, culture of A 29 et seq., 32, 35, 42, 60 Conflict of laws A 58 Constitution D 6 et seq. Constitutional claims K 48 Constitutional Law Synth. 48 et seq., 51 et seq. Coping A 42 Corporate Climate Responsibility Synth. 42 et seq., 67 et seq. Corporate disputes E 88 et seq. Corporate interest V 21, 26 et seq. Corporate law N 45 et seq. Corporate law reporting Q 51 et seq. Corporate Social Responsibility (CSR) V 22 et seq., 26 et seq.; Synth. 33, 67 Country reports Synth. 22 et seq. Court of Justice of the European Union C 6 Criminal Law L 11 et seq.; O 54 et seq. Cross-border elements F 2 et seq., 10, 17, 40 et seq. D Damage Q 18 et seq. Damage to body or health U 21 et seq. Damage to goods and objects U 21 et seq. Deforestation Alert System M 17 et seq. Delictual climate change liability Synth. 44 et seq. Democracy (and climate change litigation) A 21, 49, 51, 56 Deutsche Umwelthilfe C 12 Discretion (managerial) V 4, 6, 13, 16, 18, 28 et seq., 31 Due diligence Intro. 27, 38, 45, 68, 74 et seq., 81 et seq. Duty of Care T 63 et seq. Duty of lawfulness V 3 et seq., 15 et seq., 31 Duty of vigilance law Q 81 et seq. Duty to legislate D 25, 55 Duty to monitor lawfulness V 15, 16 et seq. Duty to protect/duty of protection D 4 et seq., 41; Y 17 et seq., 61 et seq.; Synth. 10 et seq. E ECHR R 10 et seq. Ecological justice A 11, 25–30, 41 et seq., 57, 61 Ecophilosophy A 25–28, 30 Effort sharing regulation (EU law) J 9, 12–19, Y 83 et seq. Emission reduction objectives Synth. 51 et seq. Emission trade system (EU law) J 5 Environmental Appeals Act (EAA) Y 30 et seq., 41 et seq., 95 Environmental assessments K 37–40; L 32 et seq. Environmental associations D 36 et seq. Environmental courts C 7, 20

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Environmental damage G 5 et seq., 7 et seq., 12, 15, 33 et seq., 38, 45 et seq., 47, 52 et seq.; S 45 et seq.; X 4 et seq. Environmental Damage Act X 2 et seq.; Synth. 40 Environmental impact U 28 et seq. Environmental impact assessment N 6 et seq.; Q 36 Environmental justice A 11 et seq., 16–24, 31, 34 et seq., 37, 45–48, 53, 58; Synth. 6 Environmental liability Synth. 18, 40 Environmental liability law S 65 et seq. Environmental protection clause Synth. 10, 48 Environmental tort statute S 44 et seq. ESG criteria (Environmental, Social and Governance) W 13 et seq., 18 et seq., 24 EU climate change law J 4–10 EU Climate Change Regulation Y 83 et seq. EU Governance Regulation Y 77 et seq. European Convention on Human Rights Intro. 37 et seq., 41 European Court of Human Rights C 6, D 13 et seq.; Synth. 8, 68, 85–88 European Court of Justice J 11, 24–26, 28–60 European Green Deal V 26 European Union A 7, 50, 55 Exorbitant heads of jurisdiction F 31, 36 Externalities V 7 et seq. F Facility U 14 et seq. Fault based liability G 27, 49 et seq. Federal Constitution of 1988 M 44 Federalism A 54; L 4 et seq., 16 et seq., 37 et seq. Feminism; ecofeminism A 26, 37 Fiduciary Duty W 13 et seq. Finance I 28 et seq. Financial loss U 22 Financial markets law reporting Q 67 et seq. Flexibility mechanisms (EU law) J 13–16 Foreseeability Formula T 51 et seq. Forum non conveniens F 38 et seq. Fracking O 38 et seq., 58 et seq. Francovich J 28–42 Freedom to conduct a business Q 23 French Civil Code (Articles 1833 and 1835) Q 75 et seq. Friends of the Earth C 2, 11, 22 Fundamental rights L 47 et seq.; Y 7, 10, 42, 45 et seq., 54, 60 et seq., 65 et seq.; Synth. 11, 48 Future interests A 13–15, 33 et seq., 37, 39–42, 51, 59 G General tort law S 70 et seq. Geographically remote damages X 43 German climate Case Y 45 et seq. German Law of Delict T 9 et seq.

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Index German Nuisance Law T 15 et seq. GHG emissions L 1 et seq. “Giudizio Universale” P 18 et seq. Globalism A 57 Global South A 45, 48 Global stocktake I 7, 19, 33 Global warming S 2, 9 et seq., 47 Glocal A 48 et seq., 53, 57 Green Climate Fund E 78 et seq. Greenhouse effect S 9 et seq. Greenhouse gas emissions F 2 et seq., 8 et seq., 18 et seq., 48, 57 et seq. Greenhouse Gas Emissions Exchange Act T 61 et seq., 63 et seq. Greenhouse gas, well mixed A 8, 30 et seq., 36, 38, 44 H Harm to biodiversity K 42–44 Hazardous activities G 3 et seq., 13, 23, 43 et seq., 49 et seq. Heathrow Airport O 46 et seq., 57 et seq. Highest possible ambition Intro. 42, 44 et seq., 73 et seq., 77 et seq., 81 History of global warming A 36–38, 45, 47, 59, 61 Human rights C 6, 11, 22 et seq., 29, 36; D 1 et seq.; I 18, 43 et seq.; L 47 et seq.; N 53 et seq.; O 13 et seq., 34 et seq., 50 Human Rights and climate change Intro. 16, 33, 38, 41, 44 et seq., 70, 77 Human Rights Approaches H 20–27 Human Rights litigation Synth. 56 Human rights violations P 31, 33 I ICC E 99 et seq. ICSID C 5 Imputability Synth. 64 Individual Emitters H 28–33 Indus Waters Kishenganga E 44 Inequality, socioeconomic A 16 et seq., 37, 45 Infrastructure of litigation A 48 Infringement by condition T 84 et seq. Infringement by Conduct T 87 et seq. Infringement procedure (EU law) J 20–27 Injunction Q 7, 10 Inter-American Commission on Human Rights C 6 Inter-American Court of Human Rights Intro. 46 et seq., 50; C 6 Internalisation B 3, 20 et seq., 37 et seq., 39 et seq. International Court of Justice Intro. 67; C 5 International Investment Arbitrations H 51–69 International jurisdiction S 28 et seq. International law A 47, 50, 56 International Treaty Commitments H 4–10

International Tribunal for the Law of the Sea C 2, 8, 11, 24 Investment Law H 39–69 Investment Treaty Regimes H 39–50 Investor V 26 et seq., 31 Investor-led Action W 2, 7 et seq., 18 et seq., 21 et seq., 30 et seq., 42 Italy P 1 et seq. J Joint action F 30 Judicial remedies K 9, 11, 24, 45–46, 49 Judicial review L 32 et seq., 54 Judiciary Synth. 8 et seq. Juliana v. United States C 2, 11, 22 Jurisdiction K 5, 13, 15–16, 18–19 Justice, distributive A 21, 35, 37, 47 Justice, ecological A 11, 25–30, 41 et seq., 57, 61 Justice, environmental A 11 et seq., 16–24, 31, 34 et seq., 37, 45–48, 53, 58 Justice, reparative A 37, 61 Justiciability L 39 et seq. K Kyoto Protocol C 1 et seq., 8, 11, 22 et seq., 29; E 50 et seq. L Legal Amazon M 17 Leghari C 27 et seq. Legislation (and climate change litigation) A 7, 40, 51, 54 et seq. Legislature Synth. 8 et seq., 47 Legitimacy C 2, 8, 15, 24 Leverage Synth. 56 Lex loci damni F 25, 47. Liability B 19, 33 et seq., 39 et seq.; I 14, 24 et seq. Litigation I 36 et seq., 57 et seq. Litigational objectives Synth. 9 Litigation Risk H 34–38 Litigation statistics K 1 Lliuya v. RWE A 3–10, 30, 33, 39, 43, 47, 58, 60; C 2, 8, 12, 18, 23, 26, 34 et seq.; T 20 et seq. Local court cases P 39 et seq. Localism; local A 16 et seq., 46, 48 et seq., 53, 57 Loi de vigilance Synth. 34 Long-term responsibilities A 40, 51 Long-term temperature goal I 9 et seq., 45 et seq., 60 Loss and Damage I 21 et seq., 32 M Massachusetts v. EPA A 40, 54, C 6 Mayagna C 6

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Index Mitigation Intro. 3 et seq., 12, 36 et seq., 41, 59, 73 et seq.; C 11 et seq., 21 et seq., 28 et seq.; I 8 et seq., 47 et seq.; L 32 et seq. Mitigation measures P 3 et seq. Multiscalarity A 52, 57, 61 Multi-state torts F 24 et seq. N National concern L 16 et seq. National Energy and Climate Plan R 47 et seq. National Institute of Spacial Research M 20 Nationally determined contributions (NDCs) Intro. 12, 71, 73, 77 et seq.; I 1, 7 et seq., 19 National Policy and Planning H 13–19 National Policy on Climate Change M 24 Nation state A 7, 38, 49–52 Nature of the breach giving rise to the harm J 31, 33, 58–60 Net-zero O 9 et seq., 17 et seq., 52 et seq. New York Convention E 16 et seq. Non-Governmental Organisations (NGOs) A 4, 47, 51, 58 et seq.; C 2 et seq., 9, 16, 25 et seq.; Synth. 41 Non-human beings A 25, 26, 29, 30, 43 et seq., 59, 61 Nuisance (German law) T 79 et seq. Nuisance Doctrine K 10, 12 O Object oriented ontology A 27, 44 Obstacles to successful climate change litigation Q 96 et seq. Ogiek C 6 Ogoniland C 6 Oil pollution G 13 et seq. P Paris (Climate) Agreement Intro. 12, 14 et seq., 41 et seq., 70 et seq., 73; C 11, 22; E 53 et seq.; H 1–7; I 1 et seq.; O 3, 10 et seq., 46 et seq., 63 et seq.; W 3, 8 et seq., 21, 47, 63 Permanent Court of Arbitration C 5; E 94 et seq. Permit conform operation U 5 et seq., 20, 41 et seq., 45 Permits in accordance with public law F 53 et seq. Plan B O 8 et seq., 46 Political question doctrine F 10 Polluter (originator) B 30 et seq. ‘Polluter pays’ principle A 38; B 2 et seq.; Synth. 7, 46–61 – Contents and limits B 27 et seq. – Functions B 16 et seq. – Instruments B 37 et seq. – International reach B 6 et seq., 13 et seq. – Legal nature B 8 et seq. Polycentricity C 3, 22, 34, 36 Polycentrism A 52

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Positive obligations D 12 et seq., 24 et seq., 26 et seq. Postcolonialism A 37 et seq. Precautionary principle A 41 Presumption of causation U 43 et seq. Prevention B 18, 21 Preventive injunctions U 11 Preventive measures G 3, 5, 20, 26; X 50 et seq. Principle of proportionality P 37 Principle of the separation of powers P 35 et seq. Private and family life D 14 et seq., 29 Private enforcement S 1, 4, 53, 86; Synth. 55 et seq. Procedures (before civil courts) Synth. 12 et seq. Progression Intro. 15, 32, 42, 77 et seq. Proof of causation K 52–54 Property law A 4 et seq., 7, 33 Property right Q 23 Protect Decision (Ruling) Y 42 et seq., 53 et seq. Protection of the environment D 7 et seq. Public interest V 17 et seq. Public interest litigation C 18, 35 Public trust doctrine K 45–47 R Rechtsregime A 7, 40, 54 Reinstatement costs G 16, 19 et seq. Remedial obligation X 51 Remedies Q 7 Renewable Energy O 5, 20 et seq. Representative action Y 15, 19, 23, 39, 43, 48 Resilience A 7, 42, 61 Responsibility B 23 et seq., 30 et seq. Responsible party X 28 et seq., 59 et seq. Right to health D 29 Right to life Intro. 37, 41; D 19, 30 Right to property D 20 et seq., 31 Risk A 35, 39 et seq., 41 Risk Aggravation Formula T 49 et seq. Royal prerogative L 42 et seq. RWE case A 3–10, 30, 33, 39, 43, 47, 58, 60; S 2 et seq., 24, 27 et seq., 51, 76 et seq. S Separation of powers A 7; C 19, 27 et seq.; L 42 et seq. Sic utere tuo ut alienum non laedas G 5, 11 Significant harm G 22, 26, 38, 41 et seq., 45 et seq., 52 Siting decisions A 17, 34, 46, 53 Social adequacy T 56. Socialism; ecosocialism A 26 Soft law F 4 Solutions to facilitate climate change litigation Q 100 et seq. Space A 8, 27 et seq., 31, 43–59

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Index Standard of care Intro. 27, 70 et seq., 81 Standing C 18 et seq., 26; K 6–14, 26–27; Q 12 et seq. State immunity F 6 et seq.; Synth. 14 State liability Synth. 18 et seq. State liability regimes G 2, 5, 41 State objective Synth. 48 et seq. State-owned corporations F 9. State’s misconduct Q 21 et seq. Statute of limitations A 6 Stock corporation V 1, 5, 11 et seq., 29 Strategic litigation A 47; Q 9; Synth. 61 et seq. Strict liability G 19, 32, 49 et seq. Strict liability based on dangerousness U 12 Subjective right Synth. 41, 48 Subjective rights (Schutznorm) Y 20, 34 Subsidiary F 3, 26 et seq., 33, 39 et seq. Sufficiently serious breach J 34, 36, 50–57 Superior Court of Justice (STJ) M 40 Supranationalism A 55, 57 Supreme Federal Court (STF) M 44 et seq. Sustainability A 3, 11–16, 22–25, 31, 35, 37, 41 et seq., 51, 57, 60; Synth. 6 Sustainable Investing W 64 T Tax L 16 et seq.

Temperature threshold (2/1.5 degrees Centigrade) Intro. 2, 8, 12, 37, 42 et seq., 52, 71, 77 et seq. Temporal scope of application U 56 Thought Leadership W 50 et seq. Tort C 13, 24, 31, 36 Tort law A 7, 39 et seq., 54 Total Q 42 et seq. Trail Smelter E 42 et seq. U UNFCCC E 45 et seq. United Nations Framework Convention on Climate Change R 16 et seq. Urgenda (Climate Case) A 40, 50 et seq.; C 2, 8, 11, 18, 22 et seq., 29 et seq.; O 7, 15 et seq., 52; P 36 et seq.; R 7 et seq.; Y 7 V Victim D 15 W Warsaw International Mechanism (WIM) I 22 et seq. WTO Dispute-Settlement Body C 5 Y Youth L 47 et seq.

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